Findings Citing § 200.302

Criteria: GLIDE’s award terms for Federal Award No. CE1HS52473 required submission of an annual Federal Financial Report (FFR/SF-425) within 90 calendar days after the end of the budget period. This requirement is consistent with 45 CFR 75.302(a)(2), 75.303, and 75.341 (current 2 CFR 200.302(b)(2), 200.303, and 200.328), which require financial management systems and internal controls sufficient to permit accurate, current, and complete reporting and timely submission of required federal financial reports in accordance with award terms. Condition: For the budget period ended September 29, 2024, the annual FFR was due December 28, 2024. Management submitted the report on January 30, 2025, which was 33 days after the due date Questioned Costs: There were no questioned costs identified. Context: The exception related to the annual FFR tested for this direct HHS award and indicates that report due dates were not effectively tracked and monitored for timely submission. Cause: Controls over tracking award-specific reporting deadlines, preparing the annual FFR, and ensuring timely management review and submission were not operating effectively. Effect: Late submission of required financial reports constitutes noncompliance with award terms and increases the risk of delayed grantor monitoring, delayed payment processing, or other follow-up by the awarding agency. Recommendation: Establish a reporting calendar by award and budget period, assign responsibility for preparation and review of each FFR, require documented supervisory review before submission, and retain evidence of submission and any approved extensions. Repeat finding: This is not a repeat finding.

Finding 2025-002:Significant Deficiency inFinancialManagementSystemAffectingFederalAward Tracking and SEFA Preparation Information on the Federal Program: Assistance Listing Number 10.766 – Community Facilities Loans and Grants, U.S. Department of Agriculture. Award Number: SFRMWQVG79M5. Compliance requirements: Reporting. Type of finding: Significant deficiency. Criteria: 2 CFR 200.302(b)(3) requires that financial management systems maintain records that sufficiently identify the amount,source,andexpenditureofFederalfundsandprovideinformationnecessarytopermit the preparation of required financial and program reports, including the Schedule of Expenditures of Federal Awards. In addition, the auditee is responsible forpreparationofacompleteandaccurateScheduleofExpenditures of Federal Awards for inclusion in the single audit reporting package. Condition and context: During our audit procedures, we noted that expenditures were not consistently recorded in the general ledger in a manner that identifies the applicable funding source or federal program. As aresult:  Federal expenditures could not be readily identified by program from the accounting records.  Supporting information necessary for preparation of the Schedule of Expenditures of Federal Awards was not accumulated within the financial managementsystem.  The Schedule of Expenditures of Federal Awards required substantial audit adjustment and reconstruction to achieve completeness and accuracy. These conditions indicate that FISH’s financial management system does not consistently provide information necessary to identify and track federal award activity. Cause: FISH did not implement or maintain a general ledger structure or supporting processes that identify expenditures by funding source at the transaction level, nor were procedures in place to reconcile or accumulate federal award expenditures during the reporting period. Effect or potential effect: The deficiencies increase the risk that:  The Schedule of Expenditures of Federal Awards may be incomplete orinaccurate.  The majorprogram(s)maynotbeproperlyidentifiedinaccordancewithUniform Guidance.  Populations used for audit testing may be incomplete or inaccurate  Federal expenditures may not be consistently identified or reported by funding source.  Financial informationusedforinternalandexternalreportingoffederalawardsmaynotbereliable without significant manual intervention. While this condition did not result in identified questioned costs, it reflects a weakness in the financial management system required to support federal awardreporting. Questioned Costs: none. Recommendation: Werecommend thatmanagement:  Implement a chart of accounts or coding structure that identifies funding source at the transaction level.  Establish procedures to track expenditures by federal program throughout theyear.  Perform periodic reconciliations of grant activity to the general ledger.  Develop and document a formal process for preparation and review of the Schedule of Expenditures of Federal Awards. Responsible official’s response: Management agrees with the finding and has prepared a corrective actionplan.

FA 2025-003 Strengthen Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425U210012 (Year: 2024) Questioned Costs: $52,211 Description: The School District made cash drawdowns in excess of the immediate cash needs of the Elementary and Secondary School Emergency Relief Fund program. Background Information: The School District may request Elementary and Secondary School Emergency Relief program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE- 0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the Elementary and Secondary School Emergency Relief program funds are typically disbursed to the School District through an electronic payment process the next week. Criteria: As a recipient of federal awards, the School District is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance Section 200.305(b) state, “For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement by the recipient or subrecipient…” In addition, the Uniform Guidance Section 200.302(b)(6) requires that the entity develop written cash management procedures. Condition: A review of all cash drawdowns and disbursements related to the Elementary and Secondary School Emergency Relief program was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Excessive cash balances at fiscal year-end totaled $52,211. Questioned Costs: Questioned costs of $52,211 were identified for cash drawdowns in excess of reimbursable expenditures. Cause: Excess cash drawdowns resulted from failure to follow established procedures and claiming expenditures on completion reports that were not based on actual general ledger expenditures. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. Recommendation: The School District should follow established procedures to accurately forecast the cash needs of the Elementary and Secondary School Emergency Relief program and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.

FA 2025-004 Strengthen Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425U210012 (Year: 2024) Questioned Costs: None identified Description: The School District did not file accurate completion reports for the Elementary and Secondary School Emergency Relief Fund program. Background Information: The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Elementary and Secondary School Emergency Relief Fund program ends. These completion reports are filed through the Grants Application section of the MyGaDOE webportal and reflect budgeted and actual expenditure information for the Elementary and Secondary School Emergency Relief Fund program for the reporting period. If the total expenditures reflected on the completion report are more than the Elementary and Secondary School Emergency Relief Fund program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner. Criteria: As a recipient of federal awards, the School District is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.302(a) state in part that “all recipient and subrecipient financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by the terms and conditions…” In addition, provisions included in the Uniform Guidance, Section 200.302(b)(2) state that the financial management system must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements…” Condition: A review of the School District’s accounting records and the completion reports related to the Elementary and Secondary School Emergency Relief Fund program for the period of July 1, 2024 through September 30, 2024 revealed that expenditures were over reported by $56,119. Cause: Excess cash drawdowns resulted from failure to follow established procedures and claiming expenditures on completion reports that were not based on actual general ledger expenditures. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District obtained more federal funding than they were eligible to receive. Recommendation: The School District should follow established procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and DE-0147 reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.

Condition During testing of cash disbursements, the audit team was unable to locate adequate supporting documentation for selected transactions sufficient to determine whether the costs charged were allowable and the activities were allowed under the applicable federal award(s). Documentation such as invoices, receipts, contracts, approvals, or evidence linking the expenditure to an allowable activity could not be located or provided by the Institute. Criteria Per 2 CFR § 200.403, costs charged to a federal award must be necessary, reasonable, and adequately documented. Per 2 CFR § 200.302 and § 200.334, non-federal entities must maintain financial records, including source documentation (e.g., invoices, receipts, canceled checks, time and effort records) that support the allowability, allocability, and reasonableness of costs charged to federal awards, and these records must be retained and readily accessible for a minimum of three years. Additionally, 2 CFR § 200.404 and § 200.405 require that costs be allocable and consistently applied to allowable program activities. Cause The Institute's recordkeeping and document retention practices did not ensure that supporting documentation for cash disbursements was consistently maintained, organized, or readily retrievable. This may be attributable to insufficient internal controls over document retention, lack of a centralized filing/records system, or turnover in staff responsible for maintaining disbursement records. Effect Without adequate supporting documentation, the Institute cannot demonstrate that disbursed funds were used for allowable costs and allowed activities in accordance with the terms of the federal award(s). This exposes the Institute to the risk of questioned costs, disallowed expenditures, required repayment to the funding agency, and potential findings of noncompliance in future audits. It also limits the Institute's ability to demonstrate accountability and stewardship over federal funds. Recommendation We recommend that the Institute strengthen internal controls over cash disbursements to ensure supporting documentation (invoices, receipts, approvals, and evidence of allowable activity) is obtained and retained for every transaction prior to disbursement. The Institute should implement a centralized, organized recordkeeping system (physical or electronic) for disbursement documentation, with clear responsibility assigned for maintenance and retrieval. The Institute should also provide training to relevant staff on documentation retention requirements under 2 CFR Part 200. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and recommendation. The Institute recognizes that complete and readily retrievable supporting documentation is necessary to demonstrate the allowability, allocability, and reasonableness of costs charged to all awards. Management will strengthen its cash disbursement and record-retention procedures to ensure invoices, receipts, approvals, contracts, and other applicable supporting documentation are maintained for each transaction. The Institute implemented a centralized electronic recordkeeping process for cash disbursement documentation and assigned responsibility for maintaining and retrieving supporting records. Documentation supporting the expenditure and applicable approvals are retained with the transaction records. Relevant staff have been instructed on documentation and record-retention requirements applicable to federal awards. Management will hold an annual training at the beginning of the new fiscal year available to all Institute employees.

FEDERAL PROGRAM: 10.582, 10.553, 10.555 Child Nutrition Cluster CONDITION: The District submitted monthly child nutrition reimbursement claims that contained inaccurate meal counts for multiple months during the fiscal year. Specifically, the District understated reimbursable meal counts due to errors in excluding reimbursable meals served. Additionally, the District was unable to provide supporting documentation for several months of reimbursement claims. CRITERIA: Management is responsible for ensuring reporting meets the Reporting Principles as required by 2 CFR §200.302, §200.328 and program regulations, where information reported is complete, accurate and timely. Monthly claim reports submitted through the state reporting system must accurately reflect reimbursable meals served. EFFECT: While the reimbursing state agency corrected the errors and reimbursed the District for the corrected amounts, the incorrect filings could potentially result in the District not being reimbursed the full amount to which it is entitled under the grant specifications. CAUSE: Insufficient staff training resulted in reimbursement claims requests to be misstated or lack sufficient and appropriate supporting documentation. RECOMMENDATION: We recommend the District ensures staff are adequately trained to ensure the proper documentation of child nutrition reimbursement claims is maintained. VIEWS OF RESPONSIBLE OFFICIALS: The District will continue to review their processes to ensure that child nutrition reimbursement claims are completed accurately.

Condition The Municipality could not provide sufficient and appropriate supporting documentation to substantiate the final use of $666,000 in Federal funds transferred from the Municipality’s FEMA program bank account to other municipal bank accounts. The Municipality was unable to provide adequate documentation identifying the specific purpose of the transfers or tracing the transferred Federal funds to their subsequent use. Therefore, based on the documentation available during the audit, the final use and disposition of the $666,000 could not be substantiated. Context During the fiscal year ended June 30, 2025, the Municipality transferred $666,000 from its FEMA program bank account to other municipal bank accounts through electronic bank transfers. Although the transfers represented a movement of Federal funds between accounts controlled by the Municipality, the records provided did not contain sufficient supporting documentation to identify the specific purpose of the transfers or to trace the funds to their subsequent use. The Municipality did not provide sufficient evidence to substantiate the final disposition of the transferred funds, including the related FEMA disaster, project, subaward, or subsequent program expenditures, as applicable. Program requirements require recipients and subrecipients to maintain sufficient records and supporting documentation to identify and trace Federal funds and demonstrate their use in accordance with applicable Federal requirements and the terms and conditions of the Federal award. Criteria Uniform Guidance, 2 CFR § 200.403, provides that costs charged to a Federal award must, among other requirements, be necessary and reasonable for the performance of the Federal award, allocable to the award, consistent with applicable policies and procedures, and adequately documented. Additionally, 2 CFR § 200.302 requires a non-Federal entity’s financial management system to provide for the identification and tracing of Federal awards to an adequate level of expenditures and to maintain records sufficient to demonstrate that Federal funds have been used in accordance with applicable Federal statutes, regulations, and the terms and conditions of the Federal award. Under 44 CFR §§ 206.201 and 206.203, the Public Assistance Program provides Federal assistance for eligible Emergency Work and Permanent Work, subject to applicable program requirements. Cause The Municipality did not have adequate controls and procedures to ensure that Federal funds transferred from the FEMA program bank account to other municipal accounts were properly documented, identified, and subsequently traced to their final use. Effect As a result, the Municipality could not substantiate the final use and disposition of $666,000 in Federal funds transferred from the FEMA program bank account based on the documentation provided during the audit. The lack of sufficient supporting documentation limited our ability to verify the relationship between the transferred Federal funds and the related FEMA program activities, projects, or expenditures. Questioned Cost $666,000 Recommendation We recommend that the Municipality strengthen its internal controls over Federal funds by establishing procedures to ensure that all transfers from FEMA program bank accounts to other municipal accounts are adequately documented and remain fully traceable to their final use.

Program: COVID19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing No.: 21.027 Federal Agency: U.S. Department of Treasury Pass-Through Agency: State of California Federal Award Year: FY2024-25 Compliance Requirement: Reporting Questioned Costs: None Condition: The City did not report accurate expenditures during the year in its Project and Expenditure Quarterly Reports for the uses of ARPA funding. The reports contained incorrect project amounts and expenditure classifications due to internal control deficiencies, including insufficient review and reconciliation by someone other than the preparer. Criteria: Per 2 CFR 200.302(b)(3) and 2 CFR 200.328, recipients of federal funds are required to maintain accurate financial records and report expenditures in accordance with federal award terms. Specifically, recipients of ARPA funding are required to submit accurate quarterly Project and Expenditure Reports to provide transparency and ensure funds are used in compliance with allowable purposes. Cause: The inaccuracies resulted from a lack of sufficient internal controls over the reporting process. Specifically:  No independent review was performed to validate the accuracy and completeness of the quarterly reports.  Documentation of the expenditure allocation process was not consistently maintained to support the reported amounts.  The timing of the prior year audit limited the City’s ability to implement corrective measures before the FY2025 reports were due.  There was no reconciliation performed to tie underlying financial data to the quarterly reports. Effect: The lack of accurate reporting undermines compliance with the reporting requirements of the federal award. Although no unallowable costs were identified, the inaccuracies may necessitate correction of reported amounts in the future. Recommendation: We recommend that the City strengthen its internal controls over the reporting process by: 1. Identifying and correcting previous reporting amounts and balances to ensure the lifetime project is properly reported. 2. Implementing a formal review process where quarterly reports are reviewed and approved by a designated individual other than the preparer. 3. Establishing a documented process for reconciling expenditures reported to the underlying accounting records and federal award guidelines. 4. Providing training to staff responsible for the preparation and review of federal compliance reports to ensure familiarity with reporting requirements. Management’s Response: See Corrective Action Plan.

FA 2025-001 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: 84.371C – Comprehensive Literacy Development Federal Award Number: S371C190016 (Year: 2021) Questioned Costs: None Identified Description: The School District made cash drawdowns in excess of immediate cash needs of the Comprehensive Literacy Development program. Background Information: The School District may request Comprehensive Literacy Development program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the Comprehensive Literacy Development program funds are typically disbursed to the School District through an electronic payment process the next week. Criteria: As a recipient of federal awards, the School District is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance Section 200.305(b) state, “For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement by the recipient or subrecipient…” In addition, the Uniform Guidance Section 200.302(b)(6) requires that the entity develop written cash management procedures. Condition: A review of all cash drawdowns and disbursements related to the Comprehensive Literacy Development program was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Excessive cash balances totaling as much as $43,073.23 were maintained for a cumulative total of 94 days throughout FY25, occurring across multiple periods, with the longest continuous occurrence lasting 41 days. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred fund and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for the Comprehensive Literacy Development program expenditures. Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Comprehensive Literacy Development program and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur a review of the cash ledger for the Comprehensive Literacy (L4GA) grant fund 418 indicated there was an excessive cash balance for several days throughout FY25, however we respectfully disagree with the statements that the excessive cash balance was maintained for a total of 94 days and was due to the lack of review of the grant. While the LEA does agree there was an excessive cash balance in the Comprehensive Literacy/L4GA grant fund 418 for at least 94 days throughout FY25, the LEA would like to submit that per the analysis performed by the FY2025 DOAA audit team, the longest number of consecutive days for which the excessive cash balance was maintained was 41 days. It is also the view of the LEA that the excessive cash balance was not due to the lack of review of the federal grant nor due to intentionally drawing down funds from GADOE in excess of immediate cash needs, but instead largely due in part to the LEA receiving a duplicate reimbursement payment from GADOE for specific expenditures that were erroneously submitted twice by the LEA to GADOE. Finally, the LEA’s would like to submit that the cause for not immediately detecting and rectifying the excessive balance error was due to the timing of the posting of other numerous expenditures coinciding with the posting of the duplicate reimbursement payment within the 418 ledger, and the lack of review of specific reports that would have helped to identify that the cash ledger reflected an excessive cash balance from the duplicate reimbursement payment for grant expenditures. The LEA acknowledges this was unacceptable; the error should have been detected and corrected earlier in the fiscal year and there was a deficiency in the process of monitoring the cash ledger for fund 418. Auditor's Concluding Remarks: We acknowledge the LEA's response. The LEA does not dispute that an excessive cash balance existed in fund 418 during FY25 or that a deficiency in its review of the fund 418 cash ledger prevented timely detection and correction. This remains the substance of the finding. Our analysis confirms the excessive balance occurred over a cumulative 94 days, with the longest continuous occurrence lasting 41 days, and we will revise the finding to reflect this distinction. Regardless of the initiating event, including the duplicate GADOE reimbursement cited by the LEA, the LEA's response confirms that reports which would have identified the excessive balance were not reviewed, a deficiency in monitoring sufficient to ensure compliance with federal cash management requirements under 2 CFR 200.305. We reaffirm our finding, revised as noted above, and will review the LEA's corrective action during our next audit.

Finding 2025-002 Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Foster Care Title IV-E Federal Assistance Listing Number: 93.658 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Significant Deficiencies in Internal Control over Compliance Federal Award Identification Number and Year: 2201CAFOST 2025 Criteria: According to 2 CFR, Part 200.302(b)(3), recipients of federal awards are responsible for maintaining records that sufficiently identify the amount, source, and expenditure of federal funds for federal awards. These records must contain information necessary to identify federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance requirements for the Foster Care Title IV-E grant, we noted that management was unable to locate 8 approved invoices out of 40 items selected for test work. Cause: Due to turnover in the accounting department, some accounting records became misplaced and current accounting staff could not locate these records. Effect or Potential Effect: Failure to ensure expenses are being accurately supported and recorded could result in noncompliance with the grant requirements or unallowable costs being charged. Questioned Costs: $1,204 Identification as a Repeat Finding: This finding is a repeat finding of 2024-002. Auditor's Recommendation: We recommend that management implement policies, procedures, and controls to ensure supporting documentation over expenses is properly retained and expenses charged to federal awards are accurate. Views of Responsible Officials: Management understands the critical importance of maintaining proper documentation to ensure compliance with federal program requirements. To this end, the Organization will implement and reinforce a comprehensive system for retaining all invoices, payment records, and supporting documentation associated with federal awards. Additionally, the Organization will create and maintain a clear record retention policy. Summitview Child & Family Services, Inc. Schedule of Findings and Questioned Costs Year Ended June 30, 2025 32 Invoice and Payment Documentation: All invoices related to the federal program will be promptly reviewed and approved by the appropriate personnel to ensure they reflect allowable costs under the specific terms and conditions of the award. Management will establish clear procedures for the proper recording and classification of payments, ensuring that they are linked directly to the corresponding federal program expenses. All supporting documentation (e.g., purchase orders, contracts, receipts) will be retained in electronic formats within the accounting system, in accordance with the Organization's record retention policy, ensuring availability for future audits or reviews. Retention and Accessibility: The Organization will maintain a secure, organized filing system for all invoices and payments, ensuring that each record is easily accessible for audit purposes. This system will include electronic records that are stored in a centralized database, with restricted access to authorized personnel. Retained invoices and payment documentation will be kept for the full duration required by federal regulations, typically for a period of at least seven years after the final expenditure report for the federal award has been submitted, or as otherwise required by the specific federal agency. Periodic Reviews and Monitoring: To ensure ongoing compliance, Management will perform periodic reviews of federal program expenditures and documentation. This will include random sampling of invoices and payment records to confirm that they are complete, accurate, and in compliance with federal regulations. In the event of any discrepancies or issues identified during these reviews, Management will take immediate corrective action to address the issue and prevent recurrence. By maintaining thorough records of all invoices and payments, the Organization aims to not only comply with federal audit requirements but also to ensure transparency, accountability, and sound financial management of federal funds.

FINDING 2025-005 Subject: Special Education Cluster (IDEA) - Condition of Records Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 23611-051-PN01,24611-051-PN01, 22611-051-ARP, 23619-051-PN01, 25619-051-PN01, 22619-051-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Matching, Level of Effort, Earmarking; Period of Performance; Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation received reimbursements totaling $12,668,761 from the Special Education Cluster (IDEA) federal awards during the audit period. The reimbursements were associated with six separate federal awards, each of which was required to be accounted for in a separate fund within the School Corporation's financial management system. Expenditures were to be made in accordance with the approved grant applications and budgets, with reimbursement requests subsequently submitted to the Indiana Department of Education (IDOE). The School Corporation was responsible for maintaining detailed disbursement ledgers for each grant fund to support the amounts claimed for reimbursement. As is typical with reimbursement-based grants, the ending cash and investment balances of each grant fund were expected to reflect overdrawn balances until the subsequent reimbursements were received from the IDOE. The $12,668,761 received in the Special Education Cluster (IDEA) funds during the audit period was based on 23 reimbursement requests for expenditures incurred. Based on our review of grant fund records and inquiry with management, we identified the following deficiencies:  The reimbursement requests for the reimbursements received during the audit period included dates of July 1, 2021 to March 31, 2025. It was not easily determined what was requested for reimbursement for the earlier dates due to the School Corporation including in the "Dates Included in this Request" section descriptions such as "Entire Grant Period" and "Start to March 21, 2025". The supporting documentation with the reimbursement requests did not always have detail or specifically state which disbursements were included in the amount for the request. Several had documentation that showed detail for a period of time then a calculation was done to subtract what was previously requested for reimbursement. The total received in reimbursements was $12,668,761. The total detailed disbursement ledgers for the population that could be determined reflected total expenditures of $15,894,839. This resulted in $3,226,078 in disbursements in excess of what the School Corporation requested for reimbursement.  Of the six federal awards reported on the Schedule Expenditures of Awards, four reached the award's performance end date, and of those four, three reported a Grant Balance After Reimbursement on the last Reimbursement Form. o Grant 23619-051-PN01 reported a Grant Balance After Reimbursement of $1,367 on February 26, 2024. The dates included in this final request were "01/01/24 - 01/31/24." INDIANA STATE BOARD OF ACCOUNTS 29 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) o Grant 22611-051-ARP reported a Grant Balance After Reimbursement of $55,581 on December 15, 2023. The dates included in this final request were "06/01/23 - 09/30/23." o Grant 22619-051-ARP reported a Grant Balance After Reimbursement of $82,677 on December 13, 2023. The dates included in this final request were "Entire Grant Period."  Of the 23 reimbursement requests submitted, only 10 were supported by detailed disbursement ledgers that agreed with the dates and amounts claimed. The remaining 13 reimbursement requests could not be directly reconciled to the supporting documentation provided. Upon further inquiry with management, additional information was provided; however, these records lacked sufficient detail, such as transactions, reasons for overspending, and which transactions were not requested for reimbursement due to overspending. Due to the deficiencies noted above, the School Corporation was unable to provide sufficient appropriate evidence for us to determine populations, and, therefore, audit and base an opinion on the compliance requirements subject to audit that were determined to have a direct and material effect on the program. As a result, the $12,668,761 in reimbursements received during the audit period were considered questioned costs. The lack of internal controls and noncompliance were material and systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302 states in part: "(a) . . . the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. See also § 200.450. (b) The financial management system of each non-Federal entity must provide for the following (see §§ 200.334, 200.335, 200.336, and 200.337): INDIANA STATE BOARD OF ACCOUNTS 30 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income, and interest and be supported by source documentation. (4) Effective control over, and accountability, for all funds, property, and assets. The non- Federal entity must adequately safeguard all assets and ensure that they are used solely for authorized purposes. See § 200.303. (5) Comparison of expenditures with budget amounts for each Federal award. (6) Written procedures to implement the requirements of § 200.305. (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." 2 CFR 200.1 states in part: "Questioned cost means a cost that is questioned by the auditor because of an audit finding: (1) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds; (2) Where the costs, at the time of the audit, are not supported by adequate documentation; or (3) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. (4) Questioned costs are not an improper payment until reviewed and confirmed to be improper as defined in OMB Circular A-123 appendix C. (See also the definition of Improper payment in this section)." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. INDIANA STATE BOARD OF ACCOUNTS 31 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.1 states in part: ". . . Financial obligations, when referencing a recipient's or subrecipient's use of funds under a Federal award, means orders placed for property and services, contracts and subawards made, and similar transactions that require payment. Period of performance means the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Identification of the period of performance in the Federal award per § 200.211(b)(5) does not commit the awarding agency to fund the award beyond the currently approved budget period. Unliquidated financial obligations means, for financial reports prepared on a cash basis, financial obligations incurred by the non-Federal entity that have not been paid (liquidated). . . ." 2 CFR 200.309 states: "If a Federal awarding agency or pass-through entity approves an extension, or if a recipient extends under § 200.308(e)(2), the Period of Performance will be amended to end at the completion of the extension. If termination occurs, the Period of Performance will be amended to end upon the effective date of termination. If a renewal award is issued, a distinct Period of Performance will begin." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." INDIANA STATE BOARD OF ACCOUNTS 32 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Cause The School Corporation experienced turnover in key personnel over the federal program which contributed to the lack of appropriate supporting records. A proper system of internal controls was not designed to ensure continuity of policies, procedures, and records when personnel transitions occurred. Effect Noncompliance with the grant agreement and the compliance requirements could result in the repayment of federal funds. Questioned Costs We identified $12,668,761 in questioned costs as noted in the Condition and Context. Recommendation We recommended that the School Corporation's management develop policies and procedures to ensure continuity of school records during a personnel change, and that all reimbursement requests are properly supported by detailed records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-014 Subject: Teacher and School Leader Incentive Grants (formerly the Teacher Incentive Fund) - Condition of Records Federal Agency: Department of Education Federal Program: Teacher and School Leader Incentive Grants (formerly the Teacher Incentive Fund) Assistance Listings Number: 84.374 Federal Award Number and Year (or Other Identifying Number): S374A200039 Compliance Requirements: Matching, Level of Effort, Earmarking; Period of Performance; Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation received reimbursements totaling $3,530,669 from Teacher and School Leader Incentive Grants (formerly the Teacher Incentive Fund) (TSL) federal awards during the audit period. Expenditures were to be made in accordance with the approved grant applications and budgets, with reimbursement requests subsequently submitted to the U.S. Department of Education. The School Corporation was responsible for complying with requirements of the grant per the grant agreements. We found the following deficiencies: Matching, Level of Effort, Earmarking The School Corporation did not provide documentation of how the matching requirement was met. Grant award letters were not provided; therefore, we could not ensure the required percentage local match was met. Period of Performance Grant award letters would indicate the period of the grant in which expenditures are allowed to be reimbursed. However, those letters were never provided. Therefore, we could not test to ensure compliance with the Period of Performance compliance requirement. Reporting According to our understanding of the grant, there should have been two final Annual Performance Reports and two mid-year Annual Performance Reports submitted within the audit period. Two reports were provided; however, they were from outside the audit period. Since the appropriate reports were not provided for audit, we could not test to ensure compliance with the Reporting compliance requirement. There were multiple Directors over the Teacher and School Leader Incentive Grants (formerly the Teacher Incentive Fund) during the audit period. At the time the audit was conducted, no previous Directors were employed with the School Corporation and there were no current employees that were knowledgeable of the grant and its requirements. The lack of internal controls and failure to maintain and provide adequate supporting documentation were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 50 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302 states in part: "(a) . . . the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. See also § 200.450. (b) The financial management system of each non-Federal entity must provide for the following (see §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income, and interest and be supported by source documentation. (4) Effective control over, and accountability, for all funds, property, and assets. The non- Federal entity must adequately safeguard all assets and ensure that they are used solely for authorized purposes. See § 200.303. INDIANA STATE BOARD OF ACCOUNTS 51 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (5) Comparison of expenditures with budget amounts for each Federal award. (6) Written procedures to implement the requirements of § 200.305. (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award." Cause The School Corporation experienced turnover in key personnel over the federal program, which contributed to the lack of appropriate documentation. A proper system of internal controls was not designed to ensure continuity of policies, procedures, and records when personnel transitions occurred. Effect Noncompliance with the grant agreement and the compliance requirements could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management develop policies and procedures to ensure continuity of school records during a personnel change. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-022 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-010. Condition and Context During the audit period, the School Corporation received 36 total reimbursements related to the Education Stabilization Fund grant. The School Corporation received 2 ESSER I reimbursements, 8 ESSER II reimbursements, 16 ESSER III reimbursements, and 10 ARP HCY reimbursements. A sample of 15 reimbursements request forms were tested against the School Corporations records for accuracy. Of the 15 reimbursement requests forms tested, 7 totaling $9,583,074 were not supported by the School Corporation's records. The errors detected were isolated to the ESSER III grant. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 68 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following. . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause The School Corporation did not establish or implement a properly designed internal control system, including appropriate segregation of duties, to ensure the accuracy and reliability of financial data submitted to the Indiana Department of Education. The absence of formal review procedures, oversight mechanisms, and reconciliation processes resulted in the submission of materially misstated reimbursement requests. Contributing factors included inadequate staff training on federal reporting requirements, the lack of documented financial reporting policies, and insufficient allocation of resources to monitor compliance with grant guidelines. Effect As a result, 7 out of 15 reimbursement request forms tested during the audit period were either overstated or understated, reflecting inconsistent and inaccurate financial reporting tied to federal grant activity. These systemic errors represent significant noncompliance and undermine the reliability of reporting used for state and federal oversight. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 69 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation The School Corporation should strengthen its financial reporting processes related to federal grant activity by implementing a formal internal control system that ensures accuracy, consistency, and proper documentation. This includes reconciling financial records with data submitted through JotForm, establishing review procedures for reimbursement requests, and assigning qualified personnel to verify all reports prior to submission. Staff responsible for grant management and financial reporting should receive necessary support and resources regarding federal documentation standards and reporting requirements. The School Corporation should adopt standardized documentation policies and procedures across all departments to ensure compliance and oversight. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-023 Subject: Title I Grants to Local Educational Agencies - Reporting Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A220014, S010A230014, S010A240014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-006. Condition and Context The School Corporation was required to submit reimbursement requests and final expenditure reports that included, among other data, both current and prior period expenditures. However, the required reports for federal awards did not capture all activity for the reporting period and were not supported by the School Corporation's records. Reimbursement Requests The School Corporation uses reimbursement requests to claim allowable expenses paid from the Title I funds. These requests must be based on and supported by transactions recorded within the School Corporation's Title I accounts. Although internal controls were in place, they were not effective in ensuring the accuracy of the reimbursement requests. Of the 11 reimbursement requests selected for testing, 9 could not be verified against either the summary-level detail attached to the request or a detailed transaction listing. Because the amounts requested for reimbursement could not be traced to underlying records or to reports that accumulated or summarized the data, the accuracy and completeness of the reimbursement requests could not be verified. INDIANA STATE BOARD OF ACCOUNTS 70 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Final Expenditure Reports There was no documented internal control to show a review and oversight process was in place to ensure the accuracy and completeness of the final expenditure reports. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federally funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." INDIANA STATE BOARD OF ACCOUNTS 71 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The School Corporation did not design or implement an effective internal control system to ensure the accuracy and compliance of reimbursement and final expenditure reporting processes. Specifically, the School Corporation did not have established procedures requiring the retention of detailed supporting documentation for reimbursement requests, and oversight responsibilities were not consistently carried out or evidenced over the reimbursement requests and final expenditure reports. Effect Because the School Corporation did not retain detailed documentation to support reimbursement requests or provide evidence of the required review of final expenditure reports, the audit team could not verify the accuracy or completeness of expenditures charged to the grant. As a result, the risk of misreporting, misallocation of federal funds, and potential violations of grant requirements were heightened. Questioned Costs There were no questioned costs identified. Recommendation The School Corporation should establish and implement a formal internal control system to ensure accurate financial reporting and compliance with federal grant requirements. This system should include documented review procedures, clear segregation of duties, and consistent oversight of reimbursement requests and expenditure reports. All financial submissions should be supported by verifiable documentation and reconciled with internal records prior to submission. Additionally, the School Corporation should provide necessary support and resources to staff responsible for ensuring grant compliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

FINDING 2025-204 Multiple errors were identified in the amounts reported on the Rehabilitation Services Administration (RSA) reports required for the Rehabilitation Services-Vocational Rehabilitation Grants to States. Related to Prior Finding: 2024-201 Type of Finding: Material Weakness, Material Noncompliance Assistance Listing Title: Rehabilitation Services – Vocational Rehabilitation Grants to States Assistance Listing Number: 84.126 Federal Award Number: H126A230016; H126A240016; H126A250016 Program Year: October 1, 2022 - September 30, 2024; October 1, 2023 - September 30, 2025; October 1, 2024 - September 30, 2025 Federal Agency: Department of Education, Rehabilitation Services Administration Compliance Requirement: Reporting Questioned Costs: $479,178 Known Criteria: The U.S. Code of Federal Regulations (CFR) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200.303) requires that a nonfederal entity receiving federal awards establish and maintain internal controls that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions in the federal award. Section 2 CFR 200.400 contains the policy guide for cost principles related to federal grant administration. Paragraph (a) states that the nonfederal entity is responsible for the efficient and effective administration of the federal award through the application of sound management practices. Paragraph (d) states that the accounting practices of the nonfederal entity must be consistent with these cost principles and support the accumulation of costs as required by the principles and must provide for adequate documentation to support costs charged to the federal award. Section CFR 200.302 – Financial Management states that federal award recipient’s financial management system must identify all federal awards received and expended and the federal programs under which they were received. Additionally, they must maintain records that sufficiently identify the amount, source, and expenditure of federal funds for federal awards. These records must contain information necessary to identify federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Condition: The RSA requires the Commission to submit financial reports semi-annually. The reports are cumulative and cover the entire grant period through to the end of the reporting period. The RSA also requires a final report at the end of the grant period. The Vocational Rehabilitation Basic Services Grants are issued for an initial 12-month period. If State match requirements are met within the initial period, recipients qualify for an additional 12-month carryover period to spend any unobligated federal funds. Including the carryover period, the federal fiscal year 2025 grant period is October 1, 2024, through September 30, 2026. The Commission identifies the grant periods using the initials VRBAS and the last 2 digits of the grant year. During State fiscal year 2025, there were three grants open: VRBAS23, VRBAS24, and VRBAS25. We tested four semi-annual reports that were due within State fiscal year 2025. We identified errors in all four reports. The financial reports were not prepared on an award-by-award basis, which resulted in reported amounts that did not agree to the accounting records. We also identified other errors between the reported amounts and the accounting records. The following errors were identified: VRBAS23 – Reporting Period October 1, 2022, through March 31, 2024 The report was due on July 29, 2024, and was not submitted until February 28, 2025; seven months past the due date. Line 15 Federal Expenditures Incurred for Pre-employment Transition Service Activities: The amount reported was $486,965; however, accounting records showed a total of $418,472 resulting in a $68,493 overstatement. Line 28 Total Non-Federal Share of Expenditures: The amount reported was $968,661; however, accounting records showed a total of $364,414 resulting in a $604,247 overstatement. Lines 29 and 32: The purpose of Line 29 is to report unliquidated obligations to be paid with nonfederal funds meeting the nonfederal share requirements. Nonfederal share can only be credited as match when obligated in the federal fiscal year of appropriation for an award. The purpose of Line 32 is to report the liquidations from the amount of nonfederal unliquidated obligations report on Line 29 that were liquidated during a subsequent reporting period. Line 32 reflects the amount of the reported unliquidated obligations that have been liquidated in the carryover year. Line 29 Non-Federal Share of Unliquidated Obligations: The amount reported was $26,324. We recalculated the nonfederal share using outstanding authorizations reported in Orion, the Commission’s client management system. We used the amount reported of $125,946 and calculated the nonfederal share of 21.3 percent for a total of $26,826 resulting in a $502 understatement. Line 32 Non-Federal Expenditures for Unliquidated Obligations Reported on Line 29, Liquidated After September 30, 2023: The amount reported was $26,324; however, this amount was not supported in the reporting documentation, resulting in a $26,324 overstatement. Line 37 Administrative Expenditures: The amount reported was $848,533; however, accounting records and the Cost Allocation Plan support showed a total of $1,120,301 resulting in a $271,768 understatement. Line 38 Expenditures Incurred for Pre-ETS Services by Agency Staff: The amount reported was $121,463; however, accounting records showed a total of $132,767 resulting in a $11,213 understatement. Line 39 Services to Groups: The amount reported was $668,179; however, accounting records showed a total of $320,501 resulting in a $347,678 overstatement. Line 41 Innovations & Expansion Expenditures: The amount reported was $103,353; however, accounting records showed a total of $84,850 resulting in a $18,503 overstatement. VRBAS24 – Reporting Period October 1, 2023, through September 30, 2024 The report did not have a documented review prior to submission. Line 15 Federal Expenditures Incurred for Pre-employment Transition Service Activities: The amount reported was $543,497; however, accounting records showed a total of $383,020 resulting in a $160,477 overstatement. Line 18 Federal Share of Unliquidated Obligations: The amount reported was $102,977; however, we recalculated the federal share using the unliquidated obligations from Orion of $102,977 and the State match rate of 21.3 percent and determined the federal share to be $81,043, resulting in a $21,934 overstatement. Line 19 Total Federal Share: Line 19 is the total of Line 14 and Line 18. Since Line 18 was overstated by $21,934, Line 19 was also overstated by $21,934. Line 20 Unobligated Balance of Federal Funds: Line 20 is the total of the Federal Award less Line 19. If Line 19 was overstated, that resulted in Line 20 being understated by $21,934. Line 28 Total Non-Federal Share of Expenditures: The amount reported was $1,208,310; however, accounting records showed a total of $781,653 resulting in a $426,657 overstatement. Lines 29 and 32: The purpose of Line 29 is to report unliquidated obligations to be paid with nonfederal funds meeting the nonfederal share requirements. Nonfederal share can only be credited as match when obligated in the federal fiscal year of appropriation for an award. The purpose of Line 32 is to report the liquidations from the amount of nonfederal unliquidated obligations report on Line 29 that were liquidated during a subsequent reporting period. Line 32 reflects the amount of the reported unliquidated obligations that have been liquidated in the carryover year. Line 29 Non-Federal Share of Unliquidated Obligations: The amount reported was zero. We recalculated the nonfederal share using the outstanding authorizations in Orion, the Commission’s client management system. We used the amount reported in Orion of $102,977 and calculated the nonfederal share of 21.3 percent for a total of $21,934, resulting in a $21,934 understatement. Line 37 Administrative Expenditures: The amount reported was $1,240,104; however, accounting records and Cost Allocation Plan support showed a total of $1,779,969 resulting in a $539,865 understatement. Line 39 Services to Groups: The amount reported was $622,021; however, accounting records showed a total of $460,958 resulting in a $161,063 overstatement. Line 41 Innovations & Expansion Expenditures: The amount reported was $81,692; however, accounting records showed a total of $18,568 resulting in a $63,124 overstatement. VRBAS24 – Reporting Period October 1, 2023, through March 31, 2025 The report did not have a documented review prior to submission. The report was due on April 30, 2025, but was submitted May 21, 2025, three weeks past the due date. Line 15 Federal Expenditures Incurred for Pre-employment Transition Service Activities: The amount reported was $600,423; however, accounting records showed a total of $417,880 resulting in a $182,543 overstatement. Line 18 Federal Share of Unliquidated Obligations: The amount reported was $39,690; however, we recalculated the federal share using the unliquidated obligations from Orion, the Commission’s client management system, of $39,690 and the State match rate of 21.3 percent and determined the federal share to be $31,236 resulting in a $8,454 overstatement. Line 19 Total Federal Share: Line 19 is the total of Line 14 and Line 18. Since Line 18 was overstated by $8,454, Line 19 was also overstated by $8,454. Line 20 Unobligated Balance of Federal Funds: Line 20 is the total of the Federal Award, less Line 19. If Line 19 was overstated, that resulted in Line 20 being understated by $8,454. Line 28 Total Non-Federal Share of Expenditures: The amount reported was $1,208,310; however, accounting records showed a total of $1,196,358 resulting in a $11,952 overstatement. Lines 29 and 32: The purpose of Line 29 is to report unliquidated obligations to be paid with nonfederal funds meeting the nonfederal share requirements. Nonfederal share can only be credited as match when obligated in the federal fiscal year of appropriation for an award. The purpose of Line 32 is to report the liquidations from the amount of nonfederal unliquidated obligations report on Line 29 that were liquidated during a subsequent reporting period. Line 32 reflects the amount of the reported unliquidated obligations that have been liquidated in the carryover year. Line 29 Non-Federal Share of Unliquidated Obligations: The amount reported was zero. We recalculated the nonfederal share using the outstanding authorizations in Orion, the Commission’s client management system. We used the amount reported in Orion of $39,690 and calculated the nonfederal share of 21.3 percent for a total of $8,454 resulting in a $8,454 understatement. Line 37 Administrative Expenditures: The amount reported was $2,267,253; however, accounting records and Cost Allocation Plan support showed a total of $1,972,591 resulting in a $294,662 overstatement. Line 39 Services to Groups: The amount reported was $539,549; however, accounting records showed a total of $196,320 resulting in a $343,229 overstatement. Line 41 Innovations & Expansion Expenditures: The amount reported was $61,223; however, accounting records showed a total of $33,328 resulting in a $27,895 overstatement. VRBAS25 – Reporting Period October 1, 2024, through March 31, 2025 The report was due on April 30, 2025, but was submitted May 21, 2025, three weeks past the due date. Line 14 Federal Share of Expenditures: The amount reported was $66,749; however, the accounting records show a total of $0, resulting in a $66,749 overstatement. Line 15 Federal Expenditures Incurred for Pre-employment Transition Service Activities: The amount reported was $20,904; however, accounting records showed a total of $19,988 resulting in a $916 overstatement. Line 19 Total Federal Share: Line 19 is the total of Line 14 and Line 18. Since Line 14 was overstated by $66,749, Line 19 is also overstated by $66,749. Line 20 Unobligated Balance of Federal Funds: Line 20 is the total of the Federal Award, less Line 19. If Line 19 is overstated, that results in Line 20 being understated by $66,749. Line 28 Total Non-Federal Share of Expenditures: The amount reported was $524,910; however, accounting records showed a total of $143,079 resulting in a $381,831 overstatement. Line 37 Administrative Expenditures: The amount reported was $1,027,148; however, accounting records and Cost Allocation Plan support showed a total of $814,086 resulting in a $213,062 overstatement. Line 39 Services to Groups: The amount reported was $202,321; however, accounting records showed a total of $50,331 resulting in a $151,990 overstatement. Line 41 Innovations & Expansion Expenditures: The amount reported was $42,655; however, accounting records showed a total of $27,768 resulting in a $14,887 overstatement. The total errors in all reports resulted in $2,742,933 in overstatements. Two of the four submissions did not have a documented review prior to submission. Three of the four submissions were not submitted within the due date provided. Cause: The Commission has designed a procedure to detect errors in reporting prior to issuance. The reports are compiled by one individual and reviewed by a second individual prior to issuing them to the federal agency. However, the review did not detect the errors, indicating that the staff completing these reviews did not have adequate knowledge to ensure this internal control was effective. Our testing found that two of the three quarterly reports with errors were not reviewed prior to submission. The Commission could not provide an explanation for the errors. Effect: The RSA uses the RSA-17 reports to determine compliance with federal statutes, regulations, and the terms and conditions of the federal award. Incorrect reporting can affect both the ability to cover current obligations and the amount of future federal grant awards received by the State of Idaho. The total errors in the reports were overstatements of $3,693,806 and understatements of $950,874, which resulted in overall overstatements of $2,742,933. However, not all reporting errors occurred in federal expenditures and as a result we are including only the Line 14 and Line 15 - federal share of expenditures errors as questioned costs totaling $479,178 known ($68,493 VRBAS23 March 2024 Line 15 +$160,477 VRBAS24 September 2024 Line 15 +$182,543 VRBAS24 March 2025 Line 15 + $66,749 VRBAS25 March 2025 Line 14 = $916 VRBAS25 March 2025 Line 15). Recommendation: We recommend that the Commission design and implement procedures to ensure accurate federal grant reporting and retain appropriate documentation to support the amounts reported. We also recommend that the Commission review prior submissions, identify correct reporting, and communicate with the federal grantor about resubmitting corrected reports. Providing appropriate training and staff recruitment is critical to ensure the internal controls are effective in preventing or detecting errors. Management’s View: The agency agrees with the finding as we were using the cost allocation plan which changes the numbers from the ones used by the audit team and found from Luma (the state accounting system). Corrective Action: Corrective Action Objectives: • Ensure that future RSA reports are complete, accurate, consistent, and fully supported by documentation. • Establish and implement clear, standardized reporting procedures. • Retain documentation necessary to justify all reported amounts. • Identify and correct errors in previously submitted reports and communicate corrections to RSA. • Strengthen staff competencies and ensure adequate staffing levels to support proper grant reporting. Actions To Be Taken: • Form a Reporting Review Team comprising program, fiscal, and data analysts to review reports prior to submission. • Develop standardized RSA Reporting Procedures, including: o Step-by-step instructions for preparing RSA-17 o Required supporting documentation for each line item. o Definitions of allowable expenditures and required classifications. o Review and approval workflows. • Established a double-verification process, requiring two qualified staff members to independently verify all numeric entries prior to submission. • Implement a centralized documentation repository for financial records, worksheets, cost allocation documents, and reconciliation statements. • Establish a mandatory documentation checklist that must be completed before a report can be sent for approval. • Create standardized reconciliation templates tying reported amounts directly to the general ledger or supporting program records. • Complete a retrospective review of all RSA submissions for the necessary reports. • Identify inaccuracies, variances, and documentation gaps. • Develop corrected versions of each affected report. • Prepared a formal communication package for RSA including: o Corrected reports o Explanation of errors o Documentation supporting corrected amounts Conclusion This Corrective Action Plan establishes a comprehensive strategy to resolve reporting errors, strengthen documentation practices, and prevent future inaccuracies in RSA federal grant reporting. Through strengthened controls, trained staff, and rigorous review processes, the Commission will ensure ongoing compliance and improved accountability. Auditor’s Concluding Remarks: We thank the Commission for its cooperation and assistance throughout the audit.

FINDING 2025-210 The Department did not provide documented support to verify the accuracy of a Low Income Energy Assistance Program (LIHEAP) performance report. Related to Prior Finding: 2024-230 Type of Finding: Significant Deficiency, Noncompliance AL Title: Low-Income Home Energy Assistance AL Number: 93.568 Federal Award Number: 2101IDLIEA; 2301IDLIEA; 2301IDLIEE; 2401IDLIEI; 2401IDLIEA Program Year: October 1, 2022 – September 30, 2024; October 1, 2023 – September 30, 2025 Federal Agency: Department of Health and Human Services Requirement: Reporting Questioned Costs: None Criteria: The U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) included in 2 CFR 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out and risks are mitigated. These activities include approvals, authorizations, verifications, reconciliations, and segregation of duties. The Uniform Guidance included in 2 CFR 200.302(b)(3) states that the recipient's financial management system must maintain records that sufficiently identify the amount, source, and expenditure of federal funds for federal awards. These records must contain information necessary to identify federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Condition: During fiscal year 2025, the Department was required to submit one LIHEAP performance report to the federal government. The Department’s LIHEAP program manager compiled and submitted the report to the Office of Community Services. The Department was unable to provide the supporting documentation to confirm the accuracy of the information included in the report. Cause: The Department did not implement an internal control to ensure that sufficient documentation was maintained to support the accuracy of the required report. This relates to Finding 2024-230 included in the fiscal year 2024 Single Audit Report. The performance report was submitted in January 2025 prior to the issuance of the fiscal year 2024 Single Audit Report. Corrective actions associated with the prior-year finding had not been implemented at the time of the submission of the report during fiscal year 2025. Effect: Without documented support for the LIHEAP performance report, there is an increased risk of errors occurring and going undetected. Recommendation: We recommend that the Department implement internal controls and maintain sufficient documentation to support information included in LIHEAP performance reports. Management’s View: The agency agrees with the finding. Corrective Action: The Department has updated a process document that will strengthen our internal controls regarding the LIHEAP performance report. The Department will compile and retain sufficient documentation to support the information included in the LIHEAP Performance report. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.

FINDING 2025-225 The Division could not provide supporting documentation for amounts reported on the Rehabilitation Services Administration (RSA) reports required under the Rehabilitation Services -Vocational Rehabilitation Grants to States. Related to Prior Finding: 2024-237 Type of Finding: Material Weakness, Material Noncompliance Assistance Listing Title: Rehabilitation Services - Vocational Rehabilitation Grants to States Assistance Listing Number: 84.126 Federal Award Number: H126A230016, H126A240016, H126A250016 Program Year: October 1, 2022 - September 30, 2024, October 1, 2023 - September 30, 2025, October 1, 2024 - September 30, 2025 Federal Agency: Department of Education, Rehabilitation Services Administration Compliance Requirement: Reporting Questioned Costs: $9,342,357 Known Criteria: The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out throughout the operation. Verifications, approvals, and authorizations are all control activities that support this objective. The U.S. Code of Federal Regulations (CFR), 2 CFR 200.303, states that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Section CFR 200.302 – Financial Management states that federal award recipient’s financial management system must identify all federal awards received and expended and the federal programs under which they were received. Additionally, they must maintain records that sufficiently identify the amount, source, and expenditure of federal funds for federal awards. These records must contain information necessary to identify federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Condition: The RSA requires the Division to submit financial reports (RSA-17) every six months. The reports are cumulative and cover the entire grant period through the end of the reporting period. Reporting periods end on March 31 and September 30. If the reporting period is the final report for the grant, the report is due 120 days after the close of the period. All other reports are due 30 days after the close of the period. Grants are issued for an initial 12-month period. If State match requirements are met within the initial period, recipients qualify for an additional 12-month carryover period to spend any unobligated federal funds. Including the carryover period, the federal fiscal year 2025 grant period is October 1, 2024, through September 30, 2026. In State fiscal year 2025, there were 3 grants open – federal fiscal years 2023, 2024, and 2025. The Division was required to submit 4 reports for these grants. We compared the federal expenditure amounts reported for the grant in total and for the Pre-Employment Transition Services (Pre-ETS) to the amounts in Luma and found errors in all 4 as follows: Total Expenditures Grant Year Report Period End RSA-17Amount Luma Amount Difference Federal Fiscal Year 2023 9/30/24 $14,635,410 $7,465,827 $7,169,583 Federal Fiscal Year 2024 9/30/24 $9,570,662 $9,102,244 $468,418 Federal Fiscal Year 2024 3/31/25 $18,816,172 $17,716,799 $1,099,373 Federal Fiscal Year 2025 3/31/25 $16,803 $0 $16,803 TOTAL $8,754,177 Pre-ETS Grant Year Report Period End RSA-17 Amount Luma Amount Difference Federal Fiscal Year 2023 9/30/24 $3,738,844 $3,488,337 $250,507 Federal Fiscal Year 2024 9/30/24 $3,665,907 $3,617,414 $48,493 Federal Fiscal Year 2024 3/31/25 $4,131,587 $3,842,407 $289,180 Federal Fiscal Year 2025 3/31/25 $0 $0 $0 TOTAL $588,180 Cause: Reports were prepared by former employees, and the current personnel could not determine why the reported amounts did not match Luma. Further, supporting documentation was not retained by the Division, which might have provided insight into the differences. The Division stated that the amounts reported on the federal fiscal year 2023 grant for the period ended 9/30/24 were restated based on a forensic audit completed by a contractor and resubmitted to the RSA. The restated amounts are shown in the table above, but the Division could not provide documentation to support the restated amounts. Effect: The RSA uses the RSA-17 reports to determine compliance with federal statutes, regulations, and the terms and conditions of the federal award. Incorrect reporting can affect both the ability to cover current obligations and the amount of future federal grant awards received by the State of Idaho. Recommendation: We recommend that the Division design and implement procedures to ensure accurate federal grant reporting and retain appropriate documentation to support the amounts reported. We also recommend that the Division review prior submissions, identify correct reporting, and communicate with the federal grantor about resubmitting corrected reports. Management’s View: IDVR agrees that retention of supporting documentation aligned with the RSA-17 report submitted to RSA is necessary to ensure adequate documentation of the completed reports is created and maintained to support the submission. Corrective Action: IDVR has completed significant work to complete restatements of the RSA-17 for FFY2019-2024. These restatements have been accepted by the RSA Fiscal Unit and the reports were updated in RSAMIS by RSA after this process was completed in Spring 2026. With the restatement, RSA and IDVR have accepted the data based on an extensive third-party forensic review of IDVR’s financial records for these timeframes. IDVR is currently in the process of submitting the policy, procedures, and internal controls to RSA regarding the federal reporting of the RSA-17 required data elements. The fiscal staff have also worked extensively to ensure all future RSA-17 reports include supporting documentation that have been extracted from Luma and this process has been implemented as of February 2026. Once RSA approves the IDVR RSA-17 policy, procedures, and internal controls IDVR will adopt, train, and implement these documents as standard practice and will complete all future reports in accordance with the outlined controls and maintain the supporting documentation as outlined in the policy. Auditor’s Concluding Remarks: We thank the Division for its cooperation and assistance throughout the audit. We will review those improvements that were in place during fiscal year 2026 during the completion of the 2026 Single Audit.

Finding 2025-004 – Cash Management: Documentation Retention and Review of Reimbursement Requests – Material Weakness in Internal Control Over Compliance; Agencies – Department of Education, Department of Health and Human Services, National Science; Foundation, National Aeronautics and Space Administration, Department of Agriculture; Assistance Listing Numbers (ALN) - 84.356A, 93.859, 47.083, 47.050, 93.310, 43.008, 10.699, 47.078; Program Name - Alaska Native Educational Programs, Research and Development Cluster; Award Year / Award Number – FY 2025, 2024, 2023 / Award #S356A220066; FY 2025, 2024, 2023, 2022, 2021, 2020/Awards ANTHC- 23-U-396186; 5U24GM146576-02; 2049596; 2243258; ICER 2040729, Subaward 15660316; FIAN 2220560; ICER 1928230; Subaward 1558528; ICER 2052107; 2127346; 2309480; 80NSSC20M0070; 80NSSXC20M0070; 80NSSC24M0179, 24-MIRO-0054;1333MF4P0220; 18-JV-11261944-100; 2325081; 2419971, subaward 24-S37; Criteria or Specific Requirement – 2 CFR 200.303, Internal Controls, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.302 requires that non-federal entities receiving federal awards maintain record that sufficiently identify the source and application of federal funds, and all records must be supported by source documentation.; Condition –APU did not retain sufficient documentation to demonstrate that the reimbursement request was reviewed and approved before submission. The files also did not include formal reconciliations or equivalent support tying the expenditures included in the reimbursement requests to the related drawdown amounts, but rather relied on a rolling general ledger record to support amounts reimbursed. As a result, we could not verify that the related review, approval, and reconciliation controls operated as designed.; Cause – Alaska Pacific University experienced personnel shortages and management transition during the year. Formal policies and procedures were not in place to ensure reimbursement request review, approval, reconciliation, and documentation retention responsibilities were consistently performed during the transition.; Effect or Potential Effect - Without retained evidence of review and approval and reconciliations supporting reimbursement requests, management may not be able to demonstrate that controls over reimbursement requests operated as designed. This increases the risk that errors in reimbursement requests may not be identified and corrected timely.; Questioned Costs - None reported.; Context – The exceptions were identified in all 10 reimbursement requests tested. For the Research and Development Cluster, seven drawdown requests were tested out of a total of 67. For the Alaska Native Educational Program, three were tested out of a total of 9 drawdown requests.; Repeat Finding – This is not a repeat finding.; Recommendation - We recommend that management establish formal written procedures requiring reimbursement requests to be reviewed and approved before submission, with evidence of review retained. Management should also formally retain reconciliations or detailed support tying expenditures included in each drawdown request to the amount requested, and ensure these records are readily available for audit and monitoring purposes.; Views of Responsible Officials – Management concurs with the finding and is implementing formal review of cash management.

2025-002 Finding – Federal Award Type: Material Weakness in Internal Control over Compliance – Financial Management Criteria / Requirement: In accordance with 2 CFR 200.303, non-Federal entities receiving Federal awards must establish and maintain effective internal control over Federal awards that provides reasonable assurance the awards are managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR 200.302 requires recipients to maintain financial management systems that adequately identify and account for Federal awards, support the preparation of required financial reports, and accurately track expenditures to demonstrate that Federal funds were used in accordance with applicable requirements. Condition / Context: The Organization tracked Federal expenditures charged to the grant using a workbook maintained outside of its accounting system. The accounting system was not configured or maintained to separately identify expenditures associated with the Federal award. Although most expenditures recorded in the external workbook could be reconciled to the general ledger, certain expenditures could not be traced to the accounting records. As a result, the accounting system did not provide a complete and reliable record of Federal expenditures. Cause: The Organization's financial management system was not designed or utilized to separately identify and track Federal expenditures within the accounting records. Instead, grant activity was maintained through an external workbook. Effect: The lack of an integrated financial management system increases the risk that Federal expenditures may be inaccurately recorded, charged to multiple Federal awards, include unallowable costs, or otherwise fail to comply with Federal requirements. In addition, management may be unable to demonstrate the completeness and accuracy of expenditures reported under the Federal award. Questioned Costs: None. Recommendation: We recommend the Organization modify its financial management system to separately identify and track Federal award expenditures within the accounting records. Management should discontinue reliance on external workbooks as the primary record of Federal expenditures and ensure the accounting system provides complete, accurate, and auditable records sufficient to support Federal financial reporting and compliance with Uniform Guidance requirements. Management’s Response: Management concurs with the finding and will implement effective internal controls over Financial Management

2025-003 Finding – Federal Award Type: Material Weakness in Internal Control over Compliance and Noncompliance – Allowable Costs Criteria / Requirement: In accordance with 2 CFR 200 Subpart E (Uniform Guidance), costs charged to a federal award must be reasonable, allocable, consistently treated, and adequately documented. In addition, 2 CFR 200.302 requires recipients to maintain financial management systems that adequately identify and support expenditures charged to Federal awards. Condition / Context: The Organization tracked Federal expenditures charged to the grant using a workbook maintained outside of its accounting system. During testing of payroll expenditures charged to the Federal award, we noted that payroll costs charged to the grant could not be identified within the general ledger because the allocations were made only within the external workbook. Although employee timesheets documented hours worked on projects related to the grant, the Organization was unable to demonstrate a direct reconciliation between the payroll amounts charged to the Federal award and the accounting records. In addition, the timesheets provided did not contain evidence of supervisory review or approval. Cause: As a result, the Organization lacked sufficient support to demonstrate that payroll costs charged to the Federal award were properly allocated, allowable, and adequately documented. This increases the risk that payroll expenditures may be inaccurately recorded, charged to multiple Federal awards, or otherwise fail to comply with Uniform Guidance requirements. Effect: The lack of an integrated financial management system increases the risk that Federal expenditures may be inaccurately recorded, charged to multiple Federal/ non-federal awards, include unallowable costs, or otherwise fail to comply with Federal requirements. Questioned Costs: $34,623 Recommendation: We recommend the Organization discontinue reliance on external workbooks as the primary record of Federal expenditures and record payroll allocations directly within the accounting system. Management should implement procedures to reconcile payroll expenditures charged to Federal awards to the general ledger and ensure that payroll allocations are supported by approved timesheets or equivalent documentation. Additionally, management should require and document supervisory review and approval of employee timesheets to strengthen internal controls over payroll costs charged to Federal awards. Management’s Response: Management concurs with the finding and will implement effective internal controls over Allowable Costs.

2025-004 Finding – Federal Award Type: Material Weakness in Internal Control over Compliance – Cash Management Criteria / Requirement: In accordance with 2 CFR 200.303, non-Federal entities receiving Federal awards must establish and maintain effective internal control over Federal awards that provides reasonable assurance the awards are managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR 200.302 requires recipients to maintain financial management systems that adequately identify and support expenditures charged to Federal awards. Further, 2 CFR 200.305 requires recipients to minimize the time elapsed between the transfer of Federal funds and their disbursement for program purposes. Condition / Context: Cash draw requests were prepared and submitted by a single employee without documented supervisory review or approval. The draw requests were supported by an external workbook rather than directly by the Organization's accounting system or general ledger. Consequently, the Organization did not have documented internal controls within the cash draw process to prevent or detect inaccurate or unsupported draw requests prior to submission. Cause: The Organization had not implemented procedures requiring supervisory review and approval of cash draw requests prior to submission. In addition, cash draw requests were prepared using information maintained outside of the accounting system rather than being supported directly by the general ledger. Effect: The lack of documented review and reliance on records maintained outside the accounting system increases the risk that cash draw requests may include inaccurate, duplicate, or unallowable expenditures or amounts that are not adequately supported by the accounting records. In addition, the Organization may draw Federal funds in advance of eligible expenditures, resulting in noncompliance with the cash management requirements of 2 CFR 200.305. Questioned Costs: None. Recommendation: We recommend the Organization implement formal internal controls over the cash management process, including documented supervisory review and approval of all cash draw requests prior to submission. Cash draw requests should be prepared and supported using information maintained within the accounting system and reconciled to the general ledger to ensure that only allowable, properly recorded Federal expenditures are included in reimbursement requests. Additionally, management should develop and implement a written cash management policy that establishes procedures for preparing, reviewing, approving, reconciling, documenting, and retaining cash draw records in accordance with the Uniform Guidance. Management’s Response: Management concurs with the finding and will implement effective internal controls over Cash Management.

2025-006 Finding – Federal Award Type: Material Weakness in Internal Control over Compliance – Financial Reporting Criteria / Requirement: In accordance with 2 CFR 200.303, non-Federal entities receiving Federal awards must establish and maintain effective internal control over Federal awards that provides reasonable assurance the awards are managed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, 2 CFR 200.302 requires recipients to maintain financial management systems that provide accurate, current, and complete disclosure of the financial results of each Federal award, support the preparation of required financial reports, and maintain records sufficient to demonstrate compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition / Context: The Organization submitted the required Federal Financial Report (FFR) by the applicable deadline. However, the report was prepared and submitted by a single employee without documented supervisory review or approval. In addition, the FFR was prepared using an external workbook rather than being directly supported by the Organization's accounting system or general ledger. As a result, the financial management system was not sufficiently utilized to support the preparation of the required Federal financial report. Cause: The Organization had not implemented procedures requiring documented supervisory review and approval of Federal Financial Reports prior to submission. Additionally, Federal Financial Reports were prepared using information maintained outside of the accounting system rather than being generated or supported directly by the general ledger. Effect: The lack of documented review and reliance on records maintained outside of the accounting system increases the risk that Federal Financial Reports may contain incomplete, inaccurate, or unsupported financial information. Consequently, the Organization may be unable to demonstrate that financial reports submitted to the Federal awarding agency are complete, accurate, and supported by its accounting records. Questioned Costs: None.We recommend the Organization implement formal internal controls over the Federal financial reporting process, including documented supervisory review and approval of all Federal Financial Reports prior to submission. Federal Financial Reports should be prepared using information maintained within the accounting system and reconciled to the general ledger before submission to ensure the reports are complete, accurate, and fully supported. Additionally, management should develop and implement a written Federal financial reporting policy that establishes procedures for preparing, reviewing, approving, reconciling, documenting, and retaining Federal Financial Reports in accordance with the Uniform Guidance. Management’s Response: Management concurs with the finding and will implement effective internal controls over Financial Reporting.

State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Agriculture (USDA) Program Name: Summer Electronic Benefits Transfer Program for Children ALN and Program Expenditures: 10.646 ($243,395,495) Award Numbers: Various - see table of award numbers Federal Award Year: Various - see table of award numbers Questioned Costs: Cannot be determined Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Eligibility Finding 2025-029 Failure to Retain Detailed Transactions for Summer EBT Program Beneficiary Payments Condition Found: IDHS did not retain transaction-level detail for beneficiary payments under the Summer Electronic Benefits Transfer Program for Children (Summer EBT) program. IDHS provides Summer EBT benefits to Illinois children from households with incomes at or below 185% of the federal poverty standard who are enrolled in a National School Lunch Program or School Breakfast Program participating school. During our testing of the Summer EBT program, IDHS was only able to provide summary-level payment data. Consequently, we were unable to obtain sufficient, appropriate audit evidence to identify individual payments made to specific beneficiaries, precluding us from selecting a sample from a complete population of claimed expenditures to verify that expenditures: 1. Met the general allowability criteria under the Uniform Guidance (2 CFR 200, Subpart E); 2. Were disbursed only to eligible beneficiaries; and 3. Were accurately calculated and issued in accordance with program requirements. Due to the absence of transaction-level records, we were unable to conclude on IDHS’ compliance with federal requirements applicable to the Summer EBT program. Criteria or Requirement: 7 CFR 292 requires participating state agencies to maintain adequate systems and documentation to verify household eligibility and benefit issuance. Specifically, 7 CFR 292.21(b)(8) requires financial management systems for the Summer EBT program to provide support and source documents for costs. 2 CFR 200.302(b)(3) also requires the financial management system of each non-Federal entity to provide records that identify adequately the source and application of funds for federally funded activities, including authorizations, obligations, unobligated balances, expenditures, and allowable costs supported by source documentation. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure transactional level detail is maintained for Summer EBT beneficiary payments. Cause: In discussing these conditions with IDHS officials, they stated they disagree with the finding. Possible Asserted Effect: Failure to maintain transaction-level records and effective internal controls results in a scope limitation, prevents verification of program compliance, and increases the risk of issuing unallowable or erroneous payments to ineligible recipients. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2025-029) Statistical Sampling: A sample could not be selected due to the lack of a transaction-level population. The planned testing was not intended to be a statistically valid sample. Recommendation: We recommend that IDHS review and enhance its fiscal and information systems processes to ensure that detailed, transaction-level beneficiary payment records are maintained and readily retrievable. Specifically, IDHS should implement reconciliation controls between summary accounting records and individual beneficiary issuance data to ensure compliance with Uniform Guidance and federal program regulations. IDHS Response: The Department disagrees with the finding. The IDHS and its partners maintain detailed records of beneficiaries and the data will be made available in future inquiries. Auditors’ Comment: As noted in the finding above, the transaction level detail requested for our procedures was not available prior to completion of our audit.

State Agency: Illinois Department of Healthcare and Family Services (DHFS) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Children’s Health Insurance Program, Medicaid Cluster ALN and Program Expenditures: 93.767 ($583,280,105), 93.775/93.777/93.778 ($20,821,414,891) Award Numbers: Various - see table of award numbers Federal Award Year: Various - see table of award numbers Questioned Costs: $67,708,545 Compliance Requirement: Activities Allowed/Unallowed Allowable Costs/Cost Principles Finding 2025-044 Failure to Adequately Document Payment of Medical Expenditures Condition Found: DHFS could not provide sufficient supporting documentation to evidence that certain expenditures claimed under the Children’s Health Insurance Program (CHIP) and Medicaid Cluster programs were disbursed (paid) during the year ended June 30, 2025. Expenditures claimed under the CHIP and Medicaid Cluster programs are reported on a cash basis. During our testing of CHIP and Medicaid Cluster program expenditures, we noted the expenditure population provided by DHFS included transactions for which evidence of cash disbursement by the Illinois Office of Comptroller (IOC) during the year ended June 30, 2025, could not be substantiated. Specifically, we noted the following during our testing of 60 CHIP and 120 Medicaid beneficiary payments (with payments amounting to $65,490 and $265,020, respectively): • One Medicaid Cluster expenditure for medical services (with a voucher amount totaling $10,003,128) was not paid prior to June 30, 2025. • Support for one Medicaid Cluster medical services expenditure (voucher amount of $57,900) consisted solely of internal screenshots from the Medicaid Management Information System (MMIS). DHFS was unable to provide warrant numbers, electronic funds transfer (EFT) records, or other evidence confirming that payments were issued by the IOC. • Sufficient evidence of payments was not provided for two CHIP dental service expenditures (voucher amounts totaling $3,633,489). We noted payments for dental claims are processed through a third-party processor. DHFS authorizes the IOC to make periodic transfers of State funds to a locally held fund for the third-party processor to use to pay approved dental provider claims. While documentation evidencing the transfer of State funds to the locally held fund was provided, DHFS was unable to provide evidence these sampled dental expenditures were paid by its third-party processor. • DHFS could not provide warrant numbers, warrant issue dates, or paid dates to demonstrate 28 CHIP and 8 Medicaid Cluster expenditure transactions (with voucher amounts totaling $25,629 and $63,991,527, respectively) received from other State agencies for claiming under the Medicaid Cluster program had been paid during the fiscal year. We also noted DHFS has not established internal controls at a sufficient level of precision to ensure evidence supporting amounts claimed under the CHIP and Medicaid Cluster programs were paid by the IOC during the fiscal year. In addition to the exception items noted above, we noted significant time and effort was spent by DHFS and other State agencies to provide payment information for several transactions sampled in our testing because DHFS’ records did not include sufficient detail to identify the payment in the IOC’s records which delayed the completion of our audit procedures. Payments made to providers on behalf of beneficiaries of the CHIP and Medicaid Cluster programs totaled approximately $564,858,560 and $20,117,784,983, respectively, during the year ended June 30, 2025. Criteria or Requirement: 45 CFR 95.13 and 42 CFR 430.30 require federal financial participation (FFP) claimed on Form CMS-64 must be based on actual cash disbursements made by the State for medical assistance payments and administration, supported by verifiable accounting and payment records. 2 CFR 200.302(b)(3) also requires the financial management system of each non-Federal entity to provide records that adequately identify the source and application of funds for federally-funded activities. These records must contain information pertaining to, among other things, Federal awards, authorizations, financial obligations, unobligated balances, expenditures, and allowable costs. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are paid within the fiscal year they are claimed where the cash basis of accounting is used and to retain evidence the payment was made by the IOC. Cause: In discussing these conditions with DHFS officials, they stated the $10 million expenditure in question crossed fiscal years due to the timing of the process for payments funded by intergovernmental transfers (IGTs). Supporting documentation was provided for the noted dental and other agency transactions, but the audit requests were received later in the audit process and involved significant research and cooperation with other State agencies, and therefore, were not able to be resolved prior to established deadlines for audit completion. Possible Asserted Effect: Claiming expenditures without verification of actual cash payment results in noncompliance with Uniform Guidance and federal Medicaid regulations. This condition may lead to premature federal cash drawdowns, misstatement of expenditures on the Schedule of Expenditures of Federal Awards and Form CMS-64, and potential questioned costs. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2025-044) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend DHFS: • Establish and enforce internal controls to reconcile internal MMIS adjudication and voucher processing data to IOC warrant and EFT disbursement records prior to claiming federal reimbursement. • Perform a cut-off review each quarter to ensure vouchers not yet paid by the IOC are excluded from cash basis federal claims until they are disbursed. • Require other State agencies to provide sufficient detail (including warrant numbers and payment dates) confirming the funds were disbursed within the applicable reporting period. Views of DHFS Officials: DHFS partially accepts the recommendation. DHFS agrees to review and adjust its internal control procedures surrounding its financial reporting process to address timing issues to properly reflect the transactions on the cash-basis Schedule of Expenditures of Federal Awards (SEFA). DHFS will also explore any necessary improvements to the level of detail associated with transactions presented for federal claiming by other State agencies. Where applicable, DHFS will work with the applicable state agencies to obtain a sufficient level of detail supporting their claimed payments, while at the same time not expending unnecessary State resources to perform duties the other State agencies are otherwise already documenting. DHFS respectfully disagrees with the portion of the finding that it could not support the payment and subsequent federal claiming of $64 million in other State agencies’ Medical Assistance spending. As noted in the above cause statement, the audit requests were received late in the audit process and involved significant research and cooperation with other state agencies, and therefore, were not able to be resolved prior to established deadlines for audit completion. As of the date of this response, the DHFS believes it can support the proper payment and federal claiming of the $64 million in question; however, due to external time pressures further audit procedures were forgone. Auditors’ Comment: As reported in the finding above, the documentation provided for the transactions included in the Condition Found was not sufficient to permit us to ascertain accurate payments were made during the audit period. The State spent significant time and effort to research and provide documentation supporting payment details during the audit process which should have been readily available in accordance with the requirements of 2 CFR 200.302(b)(3) cited above.

Item 2025-007 - Cash Management - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Significant Deficiency) Criteria: Non-federal entities other than states are required to have internal controls in place to ensure compliance with the requirements of cash management that are contained in 2 CFR sections 200.302(b)(6) and 200,305, 31 CFR Part 205, 48 CFR sections 52.216-7(b) and 52.232-12. Statement of Condition: During our audit, we noted that there is no evidence of review and approval of drawdowns from the Health Center Program Cluster and the supporting records. Cause: LBUCC does not have a policy in place requiring the review and approval of drawdowns from the Health Center Program Cluster to be documented. Effect: Failure to document review and approval of drawdowns may result in unauthorized or incorrect drawdowns from the Health Center Program Cluster. Questioned Costs: None. Context: Although there is no evidence of review and approval of the drawdowns, the amounts of all 8 sample drawdowns tested agreed to the underlying records and supporting documents. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC implement a policy that requires all drawdowns and supporting documents to be reviewed and that such review and approval be documented. Management Response: Management agrees with the finding and will implement these steps to ensure compliance with the federal cost principles, strengthen internal controls, and reduce the risk of questioned costs.

CFDA Number: 93.224 Federal Program or Cluster: Health Center Program Cluster Grantor Agency: U.S. Department of Health and Human Services Federal Award Identification: H8FCS41177 Compliance Requirements: Cash Management Type of Finding: Noncompliance/Material Weakness in Internal Control over Compliance Questioned Costs: None Criteria: Per 2 CFR Part 200, Section 200.305, Federal payment, "payment methods must minimize the time elapsing between the transfer of funds from the Federal agency...and the disbursement of funds by the recipient… 2 CFR Part 200, Section 200.302(b)(6) also requires written procedures to implement the requirements of Section 200.305. Per HHS Grant Policy Statement: “In accordance with Dept of Treasury regulations, you must draw federal cash only for your immediate needs. At the time of draw down, you will certify you will not hold cash beyond three working days… Do not request cash to cover unliquidated encumbrances, obligation, or accrued expenditures until payment is pending”. Condition: On June 30, 2024, the Organization drew the remaining H8F funds of $1,253,464, and recorded this amount as a credit to a balance sheet account, indicating these were unspent or unearned grant funds. Throughout the year ended May 31, 2025, as expenditures were made, the Organization recorded debits to this balance sheet account, crediting a grant revenue account. The Organization's internal controls over compliance failed to prevent, or detect and correct, this noncompliance. Cause: Organization personnel were not aware of the cash management compliance requirement with respect to this federal award. The Organization's previous CEO retired approximately May 31, 2024. Per inquiry of the Organizaton's CFO, their understanding was that the deadline to obligate for this federal award was December 31, 2024, and the deadline to expend or liquidate was December 31, 2026, and they were spreading it out to what they thought was the deadline. Effect or Potential Effect: By drawing federal award funds prior to expenditure, the Organization did not comply with the requirements of 2 CFR Part 200, Section 200.305, Federal payment and of the HHS Grants Policy Statement. Context: Draws for this Federal award were taken in July, 2024 for $1,270,464. We requested supporting detail of the $1,270,464 expenditures made during the year for this Federal award as reported in the Schedule of Expenditures of Federal Awards. We received a spreadsheet that contained a list of 26 descriptions and amounts, but no transactional detail such as check numbers, check dates, payee, invoice number, invoice date, etc. After determining the check numbers and check dates for 9 of the 26 items in the spreadsheet, we noted that disburesments for 8 of those 9 occurred more than 3 days after the date the draw, with 2 disbursements made more than 5 months after the date of the draw. Repeat Finding? No Recommendation: We recommend that the Organization provide grants management training to all its financial staff and management covering the Uniform Guidance/OMB Guidance for Federal Financial Assistance. We also recommend that the Organization develop and implement policies and procedures that ensure grant funds are drawn at the time of, or following, expenditures for allowable costs by the Organization. These policies and procedures should include that, for each draw from a Federal award, 1) detailed documentation of the expenditures for which the grant funds are being drawn is prepared prior requesting the draw, including transactional details such as vendor, invoice number, invoice amount, check number, check date, payee, and check amount; 2) that the documentation supporting the draw is reviewed and approved by a member of management (other than the person who prepares the documentation) prior to requesting the draw, and 3) that the documentation supported each draw is maintained as part of the Organization's accounting records. Views of Responsible Officials: We agree with the finding. We have never received proper training. See Corrective Action Plan for Reference 2025-005.

CFDA Number: 93.224 Federal Program or Cluster: Health Center Program Cluster Grantor Agency: U.S. Department of Health and Human Services Federal Award Identification: H8FCS41177 Compliance Requirements: Reporting Type of Finding: Noncompliance/Material Weakness in Internal Control over Compliance Quiestioned Costs: None Criteria: 2 CFR Part 200, Section 200.302 Financial management requires that the Organization's financial management system must provide for the following: 1) Identification of all Federal awards received and expended and the Federal programs under which they were received..; and 2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in Sections 200.328 and 200.329. Section 200.328 Financial reporting states that the required financial reporting consists of the Federal Financial Report (SF-425). Condition: The SF-425 Federal Financial Report filed by the Organization for the H8FCS41177 Federal award reported that cash disbursements of $2,675,250, the total amount of the Federal award, had been made. However, $1,248,456 of those cash disbursements were determined during our audit to not be allowable due to not being obligated and/or liquidated by the period of performance deadlines. The cash disbursements reported on the SF-425 were not readily determinable from the Organization's general ledger accounts. Cause: Organization personnel were not aware of the period of performance with respect to this federal award. The Organization's previous CEO retired approximately May 31, 2024. Per inquiry of the Organizaton's CFO, their understanding was that the deadline to obligate for this federal award was December 31, 2024, and the deadline to expend or liquidate was December 31, 2026. The Organizaton's chart of accounts and general ledger do not include separate and distinct accounts or classes to which federal award expenditures are recorded. Effect or Potential Effect: The SF-425 Federal Financial Report filed by the Organization included cash disbursements of $1,248,456 that were not chargeable to the Federal award because they were not obligated before the period of performance end date and/or the payment was not made before the deadline to liquidate obligations. Context: We requested detail of expenditures for the Federal award and were provided with manual spreadsheets lacking all the transactional details needed. Information from the general ledger did not agree with cash disbursements reported on the SF-425. The general ledger information indicated $1,185,164 of the Federal award had not yet been disbursed at the time the SF-425 was filed. Repeat Finding: No Recommendation: We recommend that the Organization provide grants management training to all its financial staff and management covering the Uniform Guidance/OMB Guidance for Federal Financial Assistance. We also recommend that the Organization develop and implement policies and procedures for financial and performance report preparation to ensure information is supported by proper documentation and agrees with the general ledger. These policies and procedures should also include a requirement that all reports are reviewed by a member of management who is not involved in the preparation of the reports. Views of Responsible Officials: We agree with the finding. We have never received proper training. See Corrective Action Plan for Reference 2025-007.

2025-001: U.S. Department of Health and Human Services, National Institutes for Health Research and Development Cluster, Cancer Control, Assistance Listing #93.399; Lack of Required Written Policies Condition Montana Cancer Consortium (the Consortium) does not have written policies and procedures in place as required by 2 CFR § 200.302 and § 200.313. Specifically, the Consortium lacks documented policies for: • The timing of federal cash draws; • The allowability of costs charged to federal awards; and • Documentation of time-and-effort for personal services. Criteria 2 CFR § 200.302(b)(6)–(7) requires nonfederal entities to have written procedures for: (a) cash drawdowns and (b) determining cost allowability. § 200.305 requires written cash-management procedures that minimize the time between draw and disbursement. § 200.430 requires a written policy that is consistently applied to both federal and nonfederal activities for documentation of compensation for personal services. Context At the time of completion of the audit for the year ended May 31, 2025, the written policies were not in place. We noted that the policies were implemented on December 1, 2025, which was after the fiscal year under audit had ended. Cause The Consortium has not yet developed or adopted the required written policies due to limited administrative capacity and reliance on informal practices. Effect The absence of written policies increases the risk of noncompliance with federal requirements, mismanagement of federal funds, and audit findings in future periods. It may also impair the Consortium’s ability to consistently apply federal cost principles and properly safeguard assets. Recommendation We recommend that the Consortium develop and implement written policies and procedures that comply with the requirements of Uniform Guidance. Management Response See Corrective Action Plan.

2025-001: Reconciliations and Material Adjustments Questioned Costs: None How the questioned costs were computed: N/A Grant Funding Source Grant Period Head Start U.S. Department of Health 06/01/2024 05/31/2025 10CH012611 01 and Human Services Head Start U.S. Department of Health 06/01/2024 04/30/2025 10CH010945 05 and Human Services Head Start U.S. Department of Health 07/01/2022 06/30/2025 10HP000422 03 and Human Services Condition: At the time of audit fieldwork, Umatilla Morrow Head Start, Inc. had not reconciled and closed its grant and contract revenue and accrued payroll. Umatilla Morrow Head Start, Inc.'s cash reconciliation also included a deposit in transit that was never deposited. As a result, Wipfli, LLP proposed and management posted adjusting journal entries to grants receivable, refundable advance, accrued liabilities, and grant revenue. A passed adjustment was reported for the misstatement on the cash reconciliation. As Umatilla Morrow Head Start, Inc.’s internal controls did not discover these adjustments prior to our audit, a material weakness exists in Umatilla Morrow Head Start, Inc.’s internal controls over financial reporting. Criteria: Federal Regulation 2 CFR 200.302(4) requires that an organization have…Effective control over, and accountability for, all funds, property, and other assets. Cause: During the audit year, Umatilla Morrow Head Start, Inc. experienced turnover in its business office while preparing for the audit which contributed to the lack of adequate and timely closing procedures, account reconciliations, and review processes. Repeat: Yes - Years as repeat finding: Six Effect: As a result of the lack of segregation of duties surrounding bank reconciliations and not reconciling all account balances resulting in subsequent adjustments to accounts, a material weakness exists in internal controls over financial reporting. Recommendation: Accounts should be reconciled monthly with the adjustments posted timely so that management is relying on accurate financial information to make decisions. We recommend management and those charged with governance evaluate the operation of the business office and implement adequate and timely closing procedures to ensure that financial statement amounts are being reconciled, reviewed, and adjusted in a timely manner. View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.

Criteria: Federal regulations require non-federal entities to maintain records that adequately support allowable costs and program activities. Specifically, 2 CFR 200.302 requires financial management systems to provide accurate, current, and complete disclosure of financial results, and 2 CFR 200.403 requires that costs charged to federal awards be allowable, reasonable, and adequately documented. HRSA program requirements further require health centers to maintain patient-level documentation to support reported encounters and costs. Condition: During audit testing of patient eligibility and sliding fee scale application, supporting documentation of income was not available for 25 of 40 patients sampled. As a result, the health center was unable to demonstrate that the sliding fee discounts were appropriately determined in accordance with program requirements. Cause: Per HRSA and UDS requirements, FQHC’s must determine patient eligibility for the sliding fee discount based on income and family size, and retain documentation to support income verification for each patient applying for the discount. Effect: As a result, the health center is in noncompliance with HRSA sliding fee discount program requirements, which represents a material weakness in internal control over compliance and results in an increased risk that patients received sliding fee discounts for which they were not eligible or that eligible patients were improperly classified, and that Uniform Data System (UDS) data related to patient income levels and sliding fee discount utilization may be materially misstated. Questioned Costs: Questioned costs could not be determined due to the lack of supporting documentation for the affected patients. Recommendation: We recommend that management reinforce policies requiring documentation of income and family size before applying sliding fee discounts, implement periodic review of patient files to ensure compliance, provide staff training, and accountability measures for intake procedures, and consider adding monitoring on a quarterly basis to ensure ongoing adherence.

Criteria: Federal regulations require non-federal entities to maintain records that adequately support federal program reporting. Specifically, 2 CFR 200.302 requires recipients to maintain financial and programmatic records that provide accurate, current, and complete disclosure of program results, and 2 CFR 200.333 requires records to be retained and available for audit. HRSA Health Center Program requirements further require health centers to maintain documentation supporting data reported in the Uniform Data System (UDS), including patient-level records supporting Table 4 – Selected Patient Characteristics. Condition: The health center did not provide a report or reconciliation that ties source data to the totals reported in UDS Table 4 – Selected Patient Characteristics. Management provided a report based on billable visits and patients only, which excluded visits and patients for which no charge was associated. Management stated that UDS data are pulled directly from the electronic health record system (eClinicalWorks) by the compliance department using system mapping that differs from billing reports, and that the mapping will not change. As a result, the auditors were unable to verify that all patients required to be included in Table 4 were captured and accurately reported. Cause: The health center did not have documentation available to validate the accuracy and completeness of the UDS Table 4 data. Effect: Because a reconciliation or alternative audit trail was not available, the auditors were unable to determine whether UDS Table 4 data were complete and accurate, including whether non-billable patients were appropriately included. This condition increases the risk that the UDS report contains incomplete or inaccurate patient characteristic data, which may affect HRSA’s oversight, monitoring, and funding determinations. Questioned Costs: No questioned costs are reported for this finding, as the UDS report represents programmatic reporting and does not directly result in identifiable questioned costs. Recommendation: We recommend that management establish and document controls over UDS reporting, including developing reconciliations or alternative audit trails that demonstrate completeness of patient populations reported in Table 4, documenting system mapping and logic used to generate UDS data, and implementing management review procedures prior to UDS submission.

2025-002: Errors in Federal Financial Reporting and Cash Management Grant: 16.710 Public Safety Partnership and Community Policing Grants Criteria: In accordance with 2 CFR §200.302 and the Cash Management requirements in the Uniform Guidance Compliance Supplement, recipients are required to maintain effective internal controls over financial reporting to ensure that expenditures reported on Federal Financial Reports (FFRs) are accurate, supported, and based on actual allowable expenditures. Cash requests should be based on accurate expenditure information. Condition: During testing, we noted errors in the expenditures reported on quarterly Federal Financial Reports over multiple reporting periods for the FY2021 and FY2022 COPS grants. The errors in the expenditure calculations were not identified during the City's review process and remained uncorrected through the fiscal year ended April 30, 2025. Because grant reimbursements were based on the quarterly expenditure reports, the City received reimbursement amounts that did not accurately reflect actual grant expenditures during fiscal year 2025. The City performed a comprehensive review of the grant activity. The cumulative expenditures reported on the March 31, 2026 Federal Financial Report were updated, and the supporting detail and summary schedules were updated retroactively to reflect the cumulative balances. Since this report was after year-end, it was not audited. The fiscal year 2025 SEFA was adjusted to reflect the corrected expenditure amounts. Cause: The City did not maintain adequate internal controls over the preparation and review of Federal Financial Reports to ensure expenditure calculations were accurate and reconciled to the underlying accounting records prior to submission. Context: The City submitted quarterly Federal Financial Reports (FFRs) for the FY2021 and FY2022 COPS Hiring Program grants during fiscal year 2025. Errors were identified in the expenditure calculations reported on multiple quarterly FFRs. These errors remained uncorrected through April 30, 2025, and affected the cash reimbursements received during the fiscal year. Questioned Cost: None Effect or potential effect: Inaccurate expenditures were reported to the federal awarding agency over multiple reporting periods, resulting in reimbursement requests that were not based on accurate expenditure information. In addition, the original fiscal year 2025 SEFA did not agree to the corrected grant expenditure records until adjustments were made. Recommendation: We recommend the City strengthen its internal controls over federal reporting by implementing documented review and reconciliation procedures for all Federal Financial Reports prior to submission. Reported expenditures should be reconciled to the general ledger and supporting grant records, and supervisory review should be documented to ensure the accuracy of reported expenditures and related cash draws. View of responsible officials and planned corrective actions: Management concurs with the finding. During fiscal year 2026, the City identified errors in expenditure calculations reported on quarterly Federal Financial Reports (FFRs) for the FY2021 and FY2022 COPS grants. Management performed a comprehensive review of the grant activity, corrected cumulative expenditures reported on the March 31, 2026 FFR, updated supporting detail and summary schedules, and adjusted the FY2025 Schedule of Expenditures of Federal Awards (SEFA) to agree with the corrected grant expenditure records. To prevent similar errors in the future, the City will implement documented review and reconciliation procedures for all Federal Financial Reports before submission. Reported expenditures will be reconciled to the general ledger and supporting grant records, and cash reimbursement requests will be verified against actual allowable expenditures. An independent reviewer will verify the calculations, cumulative balances, supporting documentation, and reimbursement amounts. Evidence of preparation, reconciliation, and supervisory review will be retained in the City's grant files.

2025-003: Lack of Controls in Federal Financial Reporting Grant: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: In accordance with 2 CFR §200.302, recipients are required to maintain effective internal controls over financial reporting to ensure that expenditures reported on Federal Financial Reports (FFRs) are accurate, supported, and based on actual allowable expenditures. Condition: During testing, the City was not able to provide documentation that provided evidence of a separate preparer and reviewer for the Arthur Street grant reporting. Cause: The individuals responsible for reporting during the applicable period were no longer employed by the City and search of available files and email records did not identify the supporting documentation. Context: The Aruthur Street reporting was handled by the Community and Economic Development Department and the associated individuals are no longer employed by the City. Questioned Cost: None Effect or potential effect: Inaccurate reporting could occur without detection. Recommendation: We recommend the City strengthen its internal controls over federal reporting by implementing and maintaining documented review procedures for all Federal Financial Reports prior to submission. View of responsible officials and planned corrective actions: Management concurs with the finding. Management will strengthen its internal controls over federal financial reporting by implementing procedures requiring the preparation and independent review of all Federal Financial Reports (FFRs) prior to submission. The preparer and reviewer will verify reported expenditures against the City's accounting records and supporting grant documentation. The reviewer will document approval through a dated email or written sign-off confirming that the report and supporting documentation have been reviewed. Federal Financial Reports will not be submitted until the review is completed and documented. The City will maintain centralized electronic files for federal grant reporting, including submitted reports, reconciliations, supporting documentation, and evidence of supervisory review. Procedures will also be implemented to ensure that grant reporting records, reporting deadlines, and outstanding responsibilities are transferred to designated personnel when employees leave or change positions.

2025-002 - Lack of Written Federal Program Policies. Type: Material Weakness. Condition: The Village does not have documented policies and procedures specific to the administration of the Coronavirus State and Local Fiscal Recovery Funds program. This includes the absence of written guidance on key compliance areas such as payments, procurement, allowability of costs charged to federal programs, compensation, and travel costs under Uniform Guidance. Criteria: Per 2 CFR 200.303 and 200.331 of the Uniform Guidance, non-federal entities are required to establish and maintain effective internal controls and written policies to ensure compliance with federal statutes, regulations, and the terms and conditions of federal awards. These policies should be tailored to the specific requirements of each federal program. Cause: The entity has not developed formal written policies and procedures for the Coronavirus State and Local Fiscal Recovery Funds program, possibly due to reliance on informal practices or general administrative policies that do not address federal-specific requirements. Effect: Without documented policies, there is an increased risk of noncompliance with federal requirements, inconsistent program administration, and lack of accountability. This may result in questioned costs, audit findings, or potential repayment of federal funds. Recommendation: We recommend that the Village develop and implement written policies and procedures specific to the Coronavirus State and Local Fiscal Recovery Funds program. These should include: - Payments in accordance with §200.302 (6), - Procurement in accordance with §200.318, - Allowability of costs charged to federal programs in accordance with §200.302 (7), - Compensation in accordance with §200.430 and §200.431, - Travel costs in accordance with §200.474. Training should also be provided to staff responsible for administering the program to ensure consistent application of these policies. Views of Responsible Officials: Management acknowledges the auditor’s finding regarding the absence of formally documented federal program policies. We recognize the importance of maintaining written procedures to ensure consistent compliance with Uniform Guidance requirements and to strengthen internal controls over federal awards. While informal practices have historically guided our federal program administration, we agree that formalizing these policies will enhance transparency, accountability, and operational efficiency. Management is currently in the process of developing written policies covering key areas such as procurement, allowable costs, subrecipient monitoring, and cash management. We anticipate completing this documentation and implementing the policies by February 28, 2026. We are committed to continuous improvement and appreciate the auditor’s recommendations as part of our efforts to maintain strong compliance and stewardship of federal funds.

Finding: 2025-001 Incomplete Tenant Records – Section 8 HCV Program (ALN 14.871) Condition: During our review of forty (40) tenant files under the Section 8 Housing Choice Voucher (HCV) Program, we identified multiple instances of missing documentation and compliance lapses: 1. For one (1) tenant, income verification was not performed for the current year, and prior year income was rolled forward. The HUD-50058 (Family Report) form was reviewed in the PIC system but was not present in the tenant file. 2. For one (1) tenant, the Approved Lease, HUD-52517 (Request for Tenancy Approval), and HUD- 52641 (HAP Contract) forms were not present in the tenant file. Criteria: Under 2 CFR § 200.303, non-Federal entities are required to “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Additionally, 2 CFR § 200.302(b)(3) mandates that entities “maintain records which adequately identify the source and application of funds provided for federally-assisted activities.” HUD regulations governing the Section 8 Housing Choice Voucher Program (ALN 14.871) further require that tenant files include complete and timely documentation of income verification, lease approvals, and execution of required HUD forms such as HUD-50058 (Family Report), HUD-52517 (Request for Tenancy Approval), and HUD-52641 (Housing Assistance Payments Contract). These documents are essential to support eligibility determinations and ensure accurate Housing Assistance Payments. Cause: The deficiencies appear to result from inconsistent implementation of file maintenance procedures and inadequate internal controls over documentation and compliance tracking. There may also be a lack of staff training or oversight regarding HUD documentation requirements. Effect: Incomplete tenant records compromise the Housing Authority’s ability to demonstrate compliance with HUD regulations and the proper use of Federal funds. Missing documentation such as income verification and executed lease agreements may result in eligibility determinations that cannot be substantiated, increasing the risk of noncompliance. These issues could lead to program findings, reputational harm, or future funding restrictions if not addressed. Questioned Costs: There were no determinable questioned costs identified during the review. While documentation gaps were noted, the absence of supporting records did not allow for a reliable calculation of financial impact. Recommendation: We recommend that the Housing Authority strengthen internal controls over tenant file documentation by implementing a standardized checklist to ensure all required forms and records are consistently retained. Staff should receive periodic training on HUD documentation and compliance requirements to reinforce expectations and reduce errors. Management should also conduct routine internal reviews to verify that income verification and lease documentation are properly completed and maintained. These measures will help ensure that tenant eligibility and payment determinations are adequately supported and compliant with federal regulations. Reply and Corrective Action: To address these findings, the Housing Authority will implement a standardized checklist for all tenant file changes, ensuring that all required forms and records are consistently retained. The Program Administrator and staff will conduct monthly reviews of completed reexaminations to verify that all necessary documentation is present and properly filed. All paperwork related to annual reexaminations, transfers, move-ins, and interims will be scanned into the Lindsey software system within five working days of receipt, prior to physical filing. The Program Administrator will organize monthly training sessions on HCV/S8 program requirements, with participation tracked to ensure all staff attend. Weekly spot checks will be performed to confirm that the checklist is being used appropriately. These actions will be supported by updated training materials, access to the Lindsey software, and dedicated staff time for audits and training. To mitigate risks such as incomplete documentation, missed scanning deadlines, or low training attendance, the Housing Authority will implement pre-audit checklists, set automated reminders for staff, and make training mandatory. Management will monitor the implementation of these corrective actions and conduct follow-up reviews to ensure sustained compliance with HUD regulations.

U.S. Department of Transportation – AL #20.106 Airport Improvement Program – Reporting Grant Award: 3-38-0022-064-2022 Criteria The Authority is required to submit payment requests using the DOT Electronic Grants payment system, Delphi e-Invoicing. These requests must meet the standards described in 2 CFR ss 200.302 and 200.305. Additionally, Authority is required to submit annual SF-425 reports within 90 days of the end of the federal fiscal year. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there was one instance in which the amount requested was greater than invoice documentation, additionally the request included a request for reimbursement of AIP ineligible costs. As of December 31, 2024 no funds have been returned to U.S. DOT. It was also noted that multiple annual SF-425 reports were submitted late. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2024 and SF-425 reports for all open grants. Cause Employee oversight. Effect The Authority could have had federal funding delayed or reduced. Recommendation We recommend that the Authority implement internal controls to ensure all reporting is accurately filed. Repeat Finding Yes. Prior audit finding 2023-003. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

U.S. Department of Transportation – AL #20.106 Airport Improvement Program – Reporting Grant Award: 3-38-0022-064-2022 Criteria The Authority is required to submit payment requests using the DOT Electronic Grants payment system, Delphi e-Invoicing. These requests must meet the standards described in 2 CFR ss 200.302 and 200.305. Additionally, Authority is required to submit annual SF-425 reports within 90 days of the end of the federal fiscal year. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there was one instance in which the amount requested was greater than invoice documentation, additionally the request included a request for reimbursement of AIP ineligible costs. As of December 31, 2024 no funds have been returned to U.S. DOT. It was also noted that multiple annual SF-425 reports were submitted late. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2024 and SF-425 reports for all open grants. Cause Employee oversight. Effect The Authority could have had federal funding delayed or reduced. Recommendation We recommend that the Authority implement internal controls to ensure all reporting is accurately filed. Repeat Finding Yes. Prior audit finding 2023-003. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

Identification of a Repeat Finding: This is a repeat finding from the immediate previous audit, 2023-002. Criteria: Uniform Guidance requires written procedures for cash management and determining the allowability of costs in accordance with Subpart E – Cost Principals. Condition: Boone County Senior Citizen Services Corporation DBA The Bluffs did not have written procedures for cash management (2 CFR 200.302(b)(6)) and allowable costs determination (2 CFR 200.302(b)(7)) in accordance with Uniform Guidance requirements. Questioned Costs: $0 Cause: Boone County Senior Citizen Services Corporation DBA The Bluffs’ written policies and procedures were not updated to include required Uniform Guidance policies. Effect: Boone County Senior Citizen Services Corporation DBA The Bluffs could enter into a transaction that is not in compliance with Uniform Guidance requirements. Recommendation: We recommend Boone County Senior Citizen Services Corporation DBA The Bluffs draft and adopt written procedures in accordance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and is in process of developing and implementing the appropriate policies and procedures. The board anticipates approving written policies and procedures for cash management in May 2025.

Finding 2024-004 Internal Controls Over Compliance for Cash Management, Allowable Costs, Procurement, and Conflicts of Interest Federal Program: 66.468 Capitalization Grants for Drinking Water State Revolving Fund Condition: The City does not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), regarding the determination of allowable costs, procurement procedures, conflicts of interest, and cash management. Criteria: 2 CFR § 200.302(b) requires the City to have written procedures related to managing cash from federal award, including determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles. Additionally, 2 CFR § 318(a) and (c), requires the City to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance, which includes written standards of conduct that cover conflicts of interest and govern the performance of individuals engaged in procurement. Cause: The City’s policies and procedures have not been formally drafted and updated in written form. Effect: The failure to have written policies and procedures resulted in the City’s noncompliance with the requirements of the Uniform Guidance. Context: This is a general requirement that pertains to most federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend the City review the Electronic Code of Federal Regulations, particularly the sections referenced above, to obtain a better understanding of the related requirements under Uniform Guidance. Based on this understanding, we recommend the City adopt written policies and procedures pertaining to cash management, determining the allowability of costs, procurement procedures, and conflicts of interest for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.

Finding 2024-001 Internal Controls Over Compliance for Cash Management, Allowable Costs, Procurement, and Conflicts of Interest Federal Program: 14.251 Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Condition: The City did not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regard to determining allowable costs, procurement procedures, conflicts of interest, and cash management. Criteria: 2 CFR § 200.302(b) requires the City to have written procedures related to managing cash from federal awards, including determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles. Additionally, 2 CFR § 318(a) and (c), requires the City to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance, which includes written standards of conduct that cover conflicts of interest and govern the performance of individuals engaged in procurement. Cause: The City’s policies and procedures were not formally drafted and updated in written form. Effect: The failure to have written policies and procedures during the grant period resulted in the City’s temporary noncompliance with the requirements of the Uniform Guidance. Context: This is a general requirement that pertains to most federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend the City review the Electronic Code of Federal Regulations, particularly the sections referenced above, to obtain a better understanding of the related requirements under Uniform Guidance. Based on this understanding, we recommend the City adopt written policies and procedures pertaining to cash management, determining the allowability of costs, procurement procedures, and conflicts of interest for all federal programs. Since the discovery of this issue, the City has adopted written policies and procedures pertaining to cash management, determining the allowability of costs, procurement procedures, and conflicts of interest for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation, and this matter has already been resolved subsequent to year-end. See corresponding Corrective Action Plan.

FINDING 2024-004 Subject: Water and Waste Disposal Systems for Rural Communities - Reporting Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): FY2024 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-003. Condition and Context As part of sound management of the federal award, the Town was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The Town had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The Town was required to submit the following reporting to the Department of Agriculture annually: • Statement of Budget, Income, and Equity (Form RD 442-2) • Balance Sheet (Form RD 442-3) INDIANA STATE BOARD OF ACCOUNTS 21 TOWN OF PAOLI SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Form RD 442-2 covers financial operations relating to the Town's wastewater utility and the Form RD 442-3 presents the financial status of the wastewater utility. In both instances, a borrower may submit the financial data on other forms, provided the forms are in a similar format and signed and dated by the organization's official to certify the correctness of the information. Alternatively, an annual audit may be submitted in lieu of the forms. The Town did not submit the Form RD 442-2 during the audit period as required. The Town submitted the Form RD 442-3 reporting 2023 data in 2024 as required. However, this report is intended to be a comparative balance sheet as described in the USDA Rural Utilities Service Borrower's Guide. The Town did not include comparative data for 2022 in the report. There was also no documentation or other evidence of an oversight, review, or approval process for the report that was filed. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 7 CFR 1780.47 states in part: "(a) Borrowers are required to provide RUS an annual audit or financial statements. . . . (e) Borrowers exempt from audits. All borrowers who are exempt from audits, will, within 60 days following the end of each fiscal year, furnish the RUS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense by an appropriate official of the organization. Forms RD 442-2, 'Statement of Budget, Income and Equity,' and 442-3 may be used. INDIANA STATE BOARD OF ACCOUNTS 22 TOWN OF PAOLI SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (f) Management reports. These reports will furnish management with a means of evaluating prior decisions and serve as a basis for planning future operations and financial strategies. In those cases where revenues from multiple sources are pledged as security for an RUS loan, two reports will be required; one for the project being financed by RUS and one combining the entire operation of the borrower. In those cases where RUS loans are secured by general obligation bonds or assessments and the borrower combines revenues from all sources, one management report combining all such revenues is acceptable. The following management data will be submitted by the borrower to the processing office. These reports at a minimum will include a balance sheet and income and expense statement. . . . (2) Annual management reports. Prior to the beginning of each fiscal year the following will be submitted to the processing office. (If Form RD 442-2 is used as the annual management report, enter data in column three only of Schedule 1, and complete all of Schedule 2.) (i) Two copies of the management reports and proposed 'Annual Budget'. (ii) Financial information may be reported on Form RD 442-2 which includes Schedule 1, 'Statement of Budget, Income and Equity' and Schedule 2, 'Projected Cash Flow' or information in similar format. (iii) A copy of the rate schedule in effect at the time of submission. . . ." Cause The Clerk-Treasurer was only in her first year of her first term in office when these were due. As such, she was unfamiliar with the reporting requirements of the grant. Effect Without a proper system of internal controls in place that operated effectively, the Town did not file one of the two required reports, and the report that was filed was incomplete. As a result, material noncompliance occurred and remained undetected. By not reporting the comparative data, all information needed to determine the true financial status of the Town was not readily available. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management establish a proper system of internal controls and develop and implement reporting policies and procedures to ensure that all required reports are filed timely, accurately, and contain all the required information. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.

Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Additionally, per 2 CFR §200.403 and §200.302, costs charged to federal awards must be allowable, allocable, and properly documented, and financial reporting must be accurate, complete, and supported by the accounting system. Condition: Although the Parish has implemented internal controls related to the allowability of costs and the preparation of required reports for the Coronavirus State and Local Fiscal Recovery funds, they were not operating effectively during fiscal year 2024. Tests of controls indicated that transactions were not tracked appropriately to ensure they were charged to the correct funding source. In addition, quarterly project and expenditure reports submitted to the U.S. Treasury included inaccurate or unsupported information due to a lack of tracking and reconciliation procedures. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel. Parish administration and management were immediately tasked with enhancing operations related to procedural concerns from the prior administration and performing the accounting function without sufficient documentation on several balances and transactions. The documented controls were not in practice because of this. Effect: While no instances of noncompliance were noted, the lack of documented controls in practice increases the risk that future required reports could be incomplete, inaccurate, or untimely, as well as, federal costs being unallowed per the cost principles which could potentially result in program noncompliance. Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001, to prevent noncompliance of the Uniform Guidance as required.

Finding 2024-005 Internal Controls Over Compliance for Subrecipient Monitoring Federal Program: 14.251 Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Condition: The City does not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regard to determining subrecipient monitoring. Criteria: 2 CFR § 200.302(b) requires the City to have written procedures related to managing subrecipient monitoring in accordance with 2 CFR 200 Subpart D – Subrecipient Monitoring. Cause: The City’s policies and procedures have not been formally drafted and updated in written form. Effect: The failure to have written policies and procedures resulted in the City’s noncompliance with the requirements of the Uniform Guidance. Context: This is a general requirement that pertains to many federal grants. This was not identified via sampling procedures. Questioned Costs: None identified. Recommendation: We recommend the City review the Electronic Code of Federal Regulations, particularly the sections referenced above, to obtain a better understanding of the related requirements under Uniform Guidance. Based on this understanding, we recommend the City adopt written policies and procedures pertaining to subrecipient monitoring for all applicable federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.

Adjoin Schedule of Findings and Questioned Costs Year Ended December 31, 2024 Section II - Financial Statement Findings Section None noted. Section III - Federal Award Findings and Questioned Costs Section 1. Finding Number: Finding 2024-001 Program Name: Supportive Services for Veterans Families: CFDA 64.033 Pass Through Agency: N/A Type of Finding: Other matters, compliance a. Criteria: Failure to comply with the grant agreement’s terms and applicable regulations: The Organization did not comply with grant compliance requirements such as tracking administrative expenses charged to the program outside of the general ledger and in other matters noted in Supportive Services for Veterans Families (SSVF) reviews. b. Condition: During our audit, JGD reviewed the results of all reviews for the SSVF grant and noted seven compliance deficiencies were indicated in the reporting period. These deficiencies resulted in a failure of controls over compliance. Under the SSVF Program, a minimum of 90% of supportive services grant funds must be used to provide and coordinate the provision of supportive services to very lowincome Veteran families who are occupying permanent housing. A maximum of 10% of supportive services grant funds may be used for administrative costs. Per Section 62.70 of the 38 CFR Part 62, administrative costs are defined as all direct and indirect costs associated with the indirect, of subcontractors. SSVF requires grantees to provide support documentation (payroll records, invoices, receipts etc.) for all costs and expenses associated with the administration of the SSVF grant. Administrative costs should be placed in the Administrative section of an SSVF program budget. An approved Indirect Cost Rate is not considered adequate support or source documentation for costs listed in the Administrative section of the budget. Grantees are required to have a detailed breakout of these administrative costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide “records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation.” These citations are included for informational purposes:  Fiscal Administration – Administrative Expenses: Administrative expenses were not recorded in the general ledger, resulting in questioned costs.  Fiscal Administration – Unallowed Supplemental Pay: Five employees did not have evidence to support reasonableness and compliance with incentive compensation requirements, resulting in questioned costs. 25 Adjoin Schedule of Findings and Questioned Costs Year Ended December 31, 2024  Fiscal Administration – Inadequate TFA Identification: TFA expenses were not paid through credit card charges in the general ledger. This deficiency was cleared as corrective action was taken during the review.  Participant Eligibility – HMIS Release of Information Forms: Four case files were missing HMIS Release of Information Forms for household members over the age of 18.  Participant Eligibility – Missing Income Eligibility Documentation: Three case files missing income eligibility documents for Veterans and one case file missing income eligibility documents for Veteran and household members at certification of eligibility events.  Participant Eligibility – Missing Exit Checklist: Five case files did not include exit checklist documentation. This deficiency was cleared as corrective action was taken during the review.  Program Operations – Inadequate MOU: MOU for a legal subcontractor was missing required elements, including expectations and requirements for quarterly assessments and annual monitoring of performance, listing of only eligible/allowable legal services, highlighting of response time expectations and requirements to support payments, and account for Veterans that have been separated from the program and those in need of long-term legal services. c. Context: Recipients of Federal grants are required to comply with all terms and applicable regulations of grant agreements. d. Questioned Costs: Administrative expenses resulted in $937,794 and supplemental pay resulted in $1,500 in questioned costs. The Organization has disputed both findings noting the expenses are itemized within their internal tracking files and that the costs are allowable, allocable, and reasonable. The Organization has received no response from the agency. e. Cause: Internal accounting procedures, lack of compliance policies, and lack of training over verification and documentation processes, resulting in a failure of controls over compliance. f. Effect: Considered to be an other matter related to internal control over compliance. g. Recommendation: Management should take steps to ensure that all administrative expenses are properly recorded in the general ledger, supplemental pay is approved with proper evidence of approvals, and proper documentation and policies are in place to comply with all grant compliance requirements. We recommend that management closely monitor areas of non-compliance as noted in the licensing reviews. Section IV – Schedule of Prior Year Findings and Questioned Costs None noted.

Finding 2024-003 Insufficient Documentation of Other Direct Expenses Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition: During testing of direct costs charged to the federal program, the Organization did not maintain sufficient documentation to fully support all expenditures claimed. In one instance, a receipt supporting a claimed expense was missing. In three additional cases, although the expenditures were generally supported, the documentation did not clearly reflect how the amounts allocated to the major federal program were determined. While these issues were isolated and the known and likely questioned costs were immaterial, the lack of complete documentation represents noncompliance with federal requirements for allowable costs. Criteria: According to Uniform Guidance 2 CFR §200.302(b)(3), the Organization's financial management system must maintain records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. All records must be supported by source documentation. Additionally, 2 CFR §200.403(g) requires that all costs charged to federal awards must be adequately documented. Cause: These exceptions appear to result from informal documentation practices and a lack of consistent application of procedures. Management is heavily involved in the Organization’s financial processes, including allocation of costs, which can limit opportunities for independent oversight or review. The absence of a standardized and consistently enforced process for documenting cost allocations contributes to inconsistent recordkeeping. Possible of Known Effect: Although the overall financial impact of these exceptions was not material, the missing documentation prevents the Organization from fully demonstrating compliance with 2 CFR 200.403 and 200.302. Overreliance on a single individual for documentation and procedural execution without accompanying review or monitoring controls can increase the risk of errors, omissions, or audit findings, even when expenditures are reasonable and allowable. Questioned Costs: Known questioned costs of $2,742 were identified. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization implement a standardized procedure for documenting all direct and indirect cost allocations charged to federal programs, ensuring that each claim includes full supporting documentation such as receipts and annotated allocation details with consistent allocation methods. To strengthen internal controls, the Organization should consider establishing a review process for claims preparation that includes someone other than the individual preparing or allocating the expenditures. This will enhance accountability and help ensure compliance with federal documentation requirements. Views of Responsible Officials: The Organization will develop written guidelines specifying the required supporting documentation for each type of direct expense. Set up vendors in QuickBooks. We will hire and train Finance Manager to manage and track revenue and expenses, QuickBooks, grant reporting etc. All receipts and expenses will be scanned in and kept electronically. The Organization will provide training on documentation requirements, proper record submission, and compliance expectations.

2024-004: Written Policies and Procedures – Significant Deficiency Criteria and Condition: 2 CFR 200.302 requires that the recipient or subrecipient’s financial management system must provide written procedures to implement the requirements of 2 CFR 200.305 (Federal payments) and for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. Additionally, 2 CFR 200.318 requires that the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. Context: Although the Organization follows procedures that minimize the time between reimbursement of dollars and expenditure (2 CFR 200.305), verify payments made are in accordance with subpart E and terms and conditions of the award, and follow procurement standards for vendors, there are no written procedures as required by the CFR. Cause and Effect: The Organization did not maintain written procedures as required by the CFR. Questioned Costs: This finding does not result in questioned costs. Recommendation: We recommend that the Organization formally document the current policies and procedures in place to meet documentation requirements of the CFR. Views of Responsible Officials and Planned Corrective Actions: We will adopt formal policies and procedures that document our current practices and also meet the requirements of the CFR.

2024-004: Written Policies and Procedures – Significant Deficiency Criteria and Condition: 2 CFR 200.302 requires that the recipient or subrecipient’s financial management system must provide written procedures to implement the requirements of 2 CFR 200.305 (Federal payments) and for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. Additionally, 2 CFR 200.318 requires that the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. Context: Although the Organization follows procedures that minimize the time between reimbursement of dollars and expenditure (2 CFR 200.305), verify payments made are in accordance with subpart E and terms and conditions of the award, and follow procurement standards for vendors, there are no written procedures as required by the CFR. Cause and Effect: The Organization did not maintain written procedures as required by the CFR. Questioned Costs: This finding does not result in questioned costs. Recommendation: We recommend that the Organization formally document the current policies and procedures in place to meet documentation requirements of the CFR. Views of Responsible Officials and Planned Corrective Actions: We will adopt formal policies and procedures that document our current practices and also meet the requirements of the CFR.

Finding 2024-001 Interproject Payable – Amounts Owed to Other HUD Project Type of finding: Significant deficiency in internal control. Condition and context: During our audit we noted that the project has recorded a payable due to another HUD-assisted project in the amount of $3,072, and there is no documented HUD authorization supporting this obligation. Criteria: Per 2 CFR Part 200 (Uniform Guidance), §§200.302 and 200.403, federal program funds must be used only for allowable costs and in direct support of the objectives of the program. HUD requirements also prohibit the commingling of funds between projects unless explicitly authorized. Interproject payables or advances without proper documentation or timely settlement may constitute an unallowable use of program resources. Cause: Management permitted the use of funds from another HUD-assisted project to support operations of this project without obtaining HUD approval or establishing proper repayment terms. This occurred due to inadequate oversight of cash management and interproject transactions. Effect: Maintaining an outstanding payable to another HUD project: • Indicates potential misuse of federal funds. • Increases the risk of noncompliance with HUD requirements and Uniform Guidance. • May impair the project’s ability to demonstrate financial independence and program accountability. • Exposes the project to possible HUD sanctions, questioned costs, or repayment obligations. Questioned costs: Known questioned costs are $3,072. Recommendation: We recommend that project management: • Repay the outstanding payable to the related HUD project as soon as feasible. • Cease the practice of interproject borrowing unless HUD has provided explicit authorization. • Implement stronger internal controls over cash management and interproject transactions. • Document and monitor all project-level obligations to ensure compliance with HUD regulations. Views of Responsible Officials: Management agrees with this finding and the payment will be corrected. Management will review internal controls and implement a review process to only pay expenses already incurred to avoid future payments.

U.S. Department of Transportation – AL #20.106 Airport Improvement Program – Reporting Grant Award: 3-38-0022-064-2022 Criteria The Authority is required to submit payment requests using the DOT Electronic Grants payment system, Delphi e-Invoicing. These requests must meet the standards described in 2 CFR ss 200.302 and 200.305. Additionally, Authority is required to submit annual SF-425 reports within 90 days of the end of the federal fiscal year. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there was one instance in which the amount requested was greater than invoice documentation, additionally the request included a request for reimbursement of AIP ineligible costs. As of December 31, 2024 no funds have been returned to U.S. DOT. It was also noted that multiple annual SF-425 reports were submitted late. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2024 and SF-425 reports for all open grants. Cause Employee oversight. Effect The Authority could have had federal funding delayed or reduced. Recommendation We recommend that the Authority implement internal controls to ensure all reporting is accurately filed. Repeat Finding Yes. Prior audit finding 2023-003. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.

U.S. Department of Transportation – AL #20.106 Airport Improvement Program – Reporting Grant Award: 3-38-0022-064-2022 Criteria The Authority is required to submit payment requests using the DOT Electronic Grants payment system, Delphi e-Invoicing. These requests must meet the standards described in 2 CFR ss 200.302 and 200.305. Additionally, Authority is required to submit annual SF-425 reports within 90 days of the end of the federal fiscal year. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there was one instance in which the amount requested was greater than invoice documentation, additionally the request included a request for reimbursement of AIP ineligible costs. As of December 31, 2024 no funds have been returned to U.S. DOT. It was also noted that multiple annual SF-425 reports were submitted late. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2024 and SF-425 reports for all open grants. Cause Employee oversight. Effect The Authority could have had federal funding delayed or reduced. Recommendation We recommend that the Authority implement internal controls to ensure all reporting is accurately filed. Repeat Finding Yes. Prior audit finding 2023-003. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.